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🔹 Why is this topic important now?

• Spring 2025 is here, but not everyone has submitted their CFC reports for 2023 yet.
• Many have relaxed, as there are no penalties for late submission—yet delaying is risky.
• March-April is the last period to submit the shortened CFC report for 2024.
• Martial law won’t last forever, and once it ends, we’ll have limited time to settle all tax obligations.

🔹 Will there be penalties for late CFC reporting?

• Currently, there are no penalties due to deferrals.
• However, tax authorities are already sending mass inquiries about CFCs.
• Ignoring them can result in fines (approximately one minimum wage).

How to handle CFC reporting in 2025?

✅ What if financial data for 2024 is not yet available?

• Submit a shortened CFC report (without financial figures) by May 1, 2025.
• Simultaneously file the 2024 asset declaration.

⚠️ Is it difficult?

• The shortened CFC report is very simple (takes about 15 minutes to complete).
• The asset declaration may have complexities:
  • Sole proprietorship income – straightforward.
  • Foreign income – more complex (dividends, foreign taxes paid).
  • Investment profits – require proper calculations (e.g., Interactive Brokers).
• Solution: Don’t wait until the end of April—submit now.

❌ What to do with financial figures in the CFC annex if data is missing?

• Enter zeros (this is allowed).
• However, the CFC annex must still be submitted.

Tax Authority Inquiries on CFCs

📌 Mass letters from the tax office:

• The tax authority is sending “mass reminders” without legal grounds.
• These are not official requests requiring a response.

⚠️ Real tax authority inquiries:

• Ignoring official requests is risky.
• While fines are small, ignoring them can lead to audits.
• The tax office collects CFC data through banks and automatic exchanges of information.

Risks for those who haven’t reported for 2022-2023

• Many individuals haven’t submitted CFC notifications for 2022-2023.
• If a CFC was created or acquired in 2022 or later, a notification must be filed.
• This can be done quickly and online (15-20 minutes).

💡 How to avoid CFC issues in the future?

1️⃣ Monitor the financial structure of your CFC

• If a CFC earns passive income (dividends, royalties), additional taxes may apply.
• Solution: Proper structuring—e.g., a separate holding company for dividends.

2️⃣ Avoid mistakes in financial reporting

• The tax office is analyzing CFC financial statements and comparing data across companies.
• Discrepancies could lead to tax reassessments.

3️⃣ Be aware of international information exchange

• Ukraine participates in CRS (Common Reporting Standard).
• Tax authorities receive data on foreign accounts and companies.
• Delaying reporting is risky.

What about tax residency?

• The tax office is actively keeping individuals as Ukrainian tax residents.
• Sole proprietorships, real estate, registration, and even utility payments are used as arguments for residency status.
• There are court rulings that challenge these approaches.
• Best option: Obtain an official individual tax consultation (IPK) and challenge it in court if necessary.

📌 Are there penalties for CFCs?

• Penalties for late CFC report submission are temporarily suspended.
• But don’t rely on indefinite exemptions—file on time.
• Penalties may apply for failing to complete lines 31-33 in the CFC annex.

🚀 Conclusions: What should you do right now?

✅ 1. Check whether the CFC notification for 2022-2023 has been submitted.
✅ 2. Submit the shortened CFC report for 2024 by May 1, 2025.
✅ 3. Prepare the 2024 asset declaration.
✅ 4. Don’t wait until the end of the year—if financial data is available, submit the full CFC report earlier.
✅ 5. Ensure proper CFC structuring to avoid unnecessary taxes.
✅ 6. Consider tax residency and, if needed, obtain an official IPK.

🎯 Key Takeaways

💡 War and deferred penalties don’t mean you can ignore tax obligations.
💡 Sooner or later, control will tighten, and postponed issues will accumulate.
💡 The solution? Act early and seek professional advice.

🚀 Don’t wait—submit your reports now!