Controllers of controlled foreign companies, attention!
Press service of the State Tax Service of Ukraine , published 31 December 2024 at 13:49 Chapter: News
State Tax Service of Ukraine informs that the Law of Ukraine № 4113-IХ as of 04.12.2024 “On amendments to the Tax Code of Ukraine and other laws of Ukraine on stimulating development of digital economy in Ukraine”, which entered into force on 26.12.2024, introduced changes regarding application of financial sanctions to controllers of controlled foreign companies, namely: clauses 1 to 4 of Paragraph 72 Sub-section 10 Section XX “Transitional Provisions” of the Tax Code of Ukraine (hereinafter – Code) are set out in the following wording:
"For violations committed during the period from January 1, 2022 and during the martial law in Ukraine, introduced by Decree of the President of Ukraine "On introduction of the martial law in Ukraine" № 64/2022 as of 24.02.2022, approved by the Law of Ukraine "On approval of Decree of the President of Ukraine "On introduction of the martial law in Ukraine" № 2102-IX as of 24.02.2022, until the last calendar day (inclusively) of calendar month in which the martial law will be terminated or canceled:
taxpayers are not subject to financial sanctions for violations provided for in clauses 1 to 8 eight of Paragraph 120.7 Article 120 of this Code, provided that the controlling entity fulfills obligations provided for in Article 392 of this Code within six months after termination or cancellation of the martial law;
taxpayer and officials are not be subject to administrative or criminal liability for violations related to the application of provisions of Article 392 of this Code.
Information and/or documents received by the controlling authority according to Article 392 of this Code during the period from January 1, 2022 and during the martial law in Ukraine, introduced by Decree of the President of Ukraine “On introduction of the martial law in Ukraine” № 64/2022 as of 24.02.2022, approved by the Law of Ukraine “On approval of Decree of the President of Ukraine “On introduction of the martial law in Ukraine” № 2102-IX as of 24.02.2022, until the last calendar day (inclusively) of calendar month in which the martial law will be terminated or canceled”.
As follows, the controlling entity will not be subject to financial sanctions for violations committed in the period from January 1, 2022 and during the martial law in Ukraine until the last calendar day (inclusively) of calendar month in which the martial law is terminated or canceled, provided that the controlling entity fulfills obligations stipulated by Article 392 of the Code within six months after termination or cancellation of the martial law.
In view of above specified, the State Tax Service of Ukraine emphasizes the need for controlling entities to comply with rules on controlled foreign companies, which are regulated by Article 392 Section I of the Tax Code of Ukraine.
Currently, work is underway to establish controllers of controlled foreign companies who have not fulfilled obligation to report on controlled foreign companies.