Corporate, Commercial Law and Dispute Resolution · Contracts, Commercial Law and Transactions
CFC (Controlled Foreign Company) tax rates depend on whether the Ukrainian controlling person is an individual or a legal entity and on whether an exemption or foreign-tax relief applies. Rate calculation should therefore follow the CFC status and profit analysis rather than be treated as a standalone percentage.
Corporate Controlling Persons
A Ukrainian legal entity includes its attributable share of CFC profit in taxable income and applies an 18% corporate income tax rate.
Individual Controlling Persons
An individual's attributable CFC profit is subject to 18% personal income tax and an additional 1.5% military levy. These figures are and should be read together with the rules applying to the relevant reporting period.
How the Tax Is Reported
the controlling person includes the relevant CFC profit in the annual tax declaration;
the amount is calculated in proportion to the person's participation where required;
payment follows the deadlines applicable to the relevant annual filing;
financial statements and tax calculations should be retained as supporting evidence.
Possible Exemptions or Relief
The source material identifies potential relief where a double taxation agreement applies, the CFC pays foreign tax at an effective rate satisfying the statutory conditions, or the foreign company carries on genuine economic activity. Each basis requires separate documentary support.
Why Rate Analysis Matters
The effective tax burden can differ from the headline rate once foreign tax credits, exemptions, ownership percentages and the status of the controlling person are taken into account. International business planning should therefore model the full calculation rather than compare nominal tax rates only.
CFC tax-rate planning should combine the controlling person's status, attributable profit, foreign tax paid and available exemptions before the annual declaration is prepared. This produces a clearer estimate of the actual Ukrainian tax cost of the foreign structure.
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Price: Tax Rates Applied to Controlled Foreign Company (CFC) Profit in Ukraine