Submit notification to the State Tax Service, if you are owner, co-owner or person who exercises control over a foreign company

Press service of the State Tax Service of Ukraine, published 10 February 2023 at 15:57 Chapter: News

Taking into account provisions of Article 39² of the Tax Code of Ukraine (hereinafter – Code), the controlling person is an individual or a legal entity – residents of Ukraine, who are direct or indirect owners (controllers) of controlled foreign company.

Sub-paragraphs 39².5.5 Paragraph 39².5 Article 39² stipulate that individual-resident of Ukraine or legal entity who is resident of Ukraine is obliged to inform the controlling body about:

- each direct or indirect acquisition of a share in the foreign legal entity or beginning of actual control over the foreign legal entity, which leads to the recognition of such individual (legal entity) as a controlling entity according to requirements of this Article;

- foundation, creation or acquisition of property rights to a share in assets, income or profit of entity without the legal entity’s status;

- each alienation of a share in the foreign legal entity or termination of actual control over the foreign legal entity, which leads to the loss of recognition of such individual (legal entity) as a controlling entity according to requirements of this Article;

- liquidation or alienation of property rights to a share in assets, income or profit of entity without the legal entity’s status.

Notification is sent to the controlling body at the main registration place of individual-resident within 60 days from the day of such acquisition (start of actual control) or alienation (termination of actual control).

Form and procedure for sending to the controlling body of Notification on the acquisition (start of actual control) or alienation of a share (termination of actual control) by resident of Ukraine in the foreign legal entity or property rights to a share in assets, income or profit of entity without the legal entity’s status are determined by Order of the Ministry of Finance of Ukraine № 512 as of 22.09.2021.

Specifically, please note that Sub-paragraph 69.9 Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code stipulates that for taxpayers and controlling bodies there is a suspension of passage of time periods determined by tax legislation and other legislation, control over compliance with which is entrusted to the controlling bodies, in particular, except for compliance with deadlines for submission of reporting and/or documents (notifications), including those provided for in Articles 39 and 39², Paragraph 46.2 Article 46 of the Code, payment of taxes and levies by the taxpayers.

Changes to Sub-paragraph 69.9 Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code entered into force on 24.11.2022, which were made by the Law of Ukraine № 2719-IX as of 03.11.2022 "On amendments to the Tax Code of Ukraine and some other laws of Ukraine regarding the privatization of state and communal property subject to the tax lien and ensuring administration of the tax debt repayment " regarding the renewal of deadlines for providing notifications, in particular according to Art 39² of the Code.

In case that the controlling person does not notify the controlling body regarding the acquisition of a share in the foreign legal entity, formation without the legal entity’s status or beginning of actual control over the foreign legal entity, or alienation of a share in the foreign legal entity, or termination of actual control over the foreign legal entity by individual within terms stipulated in Sub-paragraph 392.5.5 Paragraph 392.5 Article 392 of the Code, liability is applied to such controlling persons according to Paragraph 120.7 Article 120 of the Code.

Reference: Requirements of Sub-paragraph 392.5.5 Paragraph 392.5 Article 392 of the Code do not apply, if the controlled foreign company is a public company, requirements for which are established by Sub-paragraph 392.4.2.2 of Sub-paragraph 39².4.2 Paragraph 39² Article 39² of the Code.