WHAT IS THE RATE OF TAXATION ON PROFIT OF A CONTROLLED FOREIGN COMPANY?

The basic income tax rate of CFC is taxed for legal entities at a rate of 18%.

The profit of the CFC, the controlling person of which is an individual, is taxed by:

• military levy – 1.5%;
• personal income tax at the rate:

– 5%, if the profit of the CFC is received in the form of dividends from enterprises registered in Ukraine,

– 9%, if such profit is received in the form of dividends from Ukrainian joint investment institutions or business entities that are not income tax payers;

– 9%, if the CFC distributes the profit before the controlling person submits the report on the CFC;

– 18% – in other cases established by the Tax Code of Ukraine.

The amount of personal income tax payable on the profits of the CFC is reduced by the amount of corporate tax actually paid by the CFC, in proportion to the share owned by the controlling person.