Declaration campaign on control over foreign companies for the reporting year 2025 demonstrates steady increase in the taxpayers’ activity.

19 045 reports have been submitted as of May 1, 2026:

9 343 – in full form;

9 702 – in abridged form.

In the previous years, number of full reports was lower:

13 559 – in 2022,

17 615 – in 2023,

18 626 – in 2024.

Declared income of controlled foreign companies remain high:

- 2 366.8 billion UAH in 2024;

- 759.7 billion UAH in 2025 (as of 01.05.2026).

The current campaign is ongoing and full reports must be submitted by the end of the year.

Popular jurisdictions by the number of registered companies:

- Poland – 23.9%,

- Cyprus – 11.3%,

- USA – 9.8%,

- Great Britain – 8.6%,

- Estonia – 8.0%.

The highest concentration of capital:

- Switzerland – 18.3%,

- Poland – 14.0%,

- USA – 10.4%,

- Cyprus – 9.9%,

- Netherlands – 6.4%.

Despite the absence of fines for reporting violations during the martial law, taxpayers demonstrate high tax culture and conscientiously declare foreign companies.

Grounds for exemption from income taxation of controlled foreign companies

Reporting analysis showed that taxpayers actively use legal conditions for exemption from income taxation of controlled foreign companies, from which:

- 53.0 % – under condition of the company’s active activity, when share of passive income is ≤ 50% (if there is Information Exchange Agreement),

- 22.6 % – if Substance is available,

- 6.2% – public company status,

- 3.6 % – if total income of all controlled foreign companies of one controller ≤ 2 million Euros,

- 1.4 % – effective corporate tax rate ≥ 13% (if there is Information Exchange Agreement),

- 13.2% – application of several grounds simultaneously.

Key tax risks

State Tax Service has identified main markers for audits:

- Offshore jurisdictions: registration of controlled foreign companies in the offshore and low-tax jurisdictions,

- Essence of income: declaration of “active” activities in the low-tax jurisdictions,

- Lack of Substance: verification of the personnel presence, fixed assets and management office in the country of registration,

- Limit of 2 million Euros: control of the total income of all controlled foreign companies by one controller (risk of artificial fragmentation of business),

- Discrepancies with CRS data.

During the martial law, taxpayers can independently correct errors in reporting without the risk of fines and penalties. Due to the constructive interaction of the State Tax Service with controllers of foreign companies, additional 135.1 million UAH was received by the budget after submitting revised declarations.