The State Tax Service of Ukraine has reported increased taxpayer activity within the Controlled Foreign Company (CFC) reporting campaign for the 2025 reporting year.
As of May 1, 2026, a total of 19,045 CFC reports had been submitted: 9,343 full reports; 9,702 simplified reports.
For comparison, the number of full reports submitted in previous years amounted to: 13,559 in 2022; 17,615 in 2023; 18,626 in 2024.
According to the tax authorities, declared CFC income remains significant: UAH 2.37 trillion for 2024; UAH 759.7 billion as of May 1, 2026 for 2025.
This demonstrates increased business attention to international tax compliance and CFC regulations.
Most popular CFC jurisdictions
By number of registered companies, the leading jurisdictions among Ukrainian controllers are Poland, Cyprus, the United States, the United Kingdom, and Estonia.
At the same time, the highest concentration of capital is located in Switzerland, Poland, the United States, Cyprus, and the Netherlands.
Most common grounds for CFC tax exemption
The State Tax Service notes that taxpayers actively use statutory exemptions from CFC taxation, including:
– active business activity – 53.0%;
– substance presence – 22.6%;
– public company status – 6.2%;
– total CFC income below EUR 2 million – 3.6%;
– effective corporate tax rate above 13% – 1.4%;
– combination of several exemptions – 13.2%.
Tax risks and regulatory focus
The tax authorities highlighted the following key risk areas:
1) offshore and low-tax jurisdictions;
2) declaring “active” business activities without sufficient economic substance;
3) lack of substance (office, personnel, management);
4) monitoring the EUR 2 million threshold;
5) discrepancies between CFC reports and CRS data.
The tax authorities also emphasized that during martial law taxpayers may voluntarily correct reporting errors without penalties or late payment interest.
Kreston Ukraine CFC practice
Given the strengthening of international tax control and automatic exchange of information, CFC compliance remains one of the key areas of tax compliance for multinational groups and private controllers.
Kreston Ukraine advises clients on:
- ownership structure analysis and controller status determination;
- preparation of CFC reports and notifications;
- assessment of tax exemption eligibility;
- substance and tax risk analysis;
- transfer pricing and international tax documentation.
We recommend that businesses regularly review ownership structures, assess international tax risks, and prepare in advance for reporting obligations under CFC and CRS requirements.
