Penalties for non-submission of CFC Reports postponed until the end of martial law


On June 18, 2024, the president of Ukraine signed Law No. 3706-IX «On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding the Peculiarities of Exporting Certain Types of Goods During the Period of Martial Law» (former draft law No. 10168-2 from 06.11.2023). This Law will come into effect on July 1, 2024.

Let’s consider the main amendments introduced by the Law in terms of controlled foreign companies (CFC) reporting for the period until the end of the martial law in Ukraine and within six months after the month of the end thereof:

Postponement of penalties

The Law postpones imposition of penalties for violations related to CFC reporting. According to the Law, taxpayers shall not be subject to the penalties specified in the first to eighth paragraphs of Clause 120.7 of the Tax Code of Ukraine (TCU), namely penalties for:

  1. failure to submit or untimely submission of the controlled foreign company report (CFC Report),
  2. failure to include in a CFC Report the information about CFCs and/or indicators mandatory under Clause 39².5.3 of the TCU (amount of income (revenue) from the sale of goods (works, services), profit from operating activities and profit before tax, calculation of adjusted profit of the CFC, the grounds for exemption from taxation of the CFC's profit, etc.),
  3. failure to notify within the timeframes determined by the TCU of acquisition or disposal of a share in a foreign legal entity, of commencement or termination of actual control over such entity.


Taxpayers and their officials shall not be subject to administrative and criminal liability for violations related to application of Article 39² of the TCU.


Information and documents received by the supervisory authority in accordance with Article 39² of the TCU are restricted information. They cannot be requested by law enforcement agencies and be considered as evidence in criminal proceedings.

Statute of limitations

The statute of limitations provided for in Article 102 of the TCU for imposition of the tax liability based on the information contained in the CFC Report (seven years) shall start from the date of submission of the respective CFC Report to the supervisory authority.

These provisions of the adopted Law are intended to ease the burden during martial law for those entrepreneurs and business owners who structure their businesses through foreign companies in foreign jurisdictions. However, we would like to direct your attention to the fact that duties to submit CFC notifications (e.g., of acquisition or disposal of shares in a CFC) and CFC Reports have not been cancelled or postponed during martial law.

Furthermore, the Law does not provide for complete cancellation of penalties for violation of these duties but only for postponement of their imposition on controlling persons during martial law. The information on the CFC shall be submitted in timely manner, as penalties may be imposed after the end of martial law. In addition, the statute of limitations for supervisory authorities to impose penalties for the abovementioned violations, including failure to submit a CFC Report, are not interrupted for the martial law period in Ukraine.

INTEGRITES recommends that controlling persons in CFCs submit CFC Reports within legally established timeframes, in order to avoid possible penalties in the future. Similarly, we recommend submitting CFC notifications in a timely and proper manner.

You can familiarize yourself with the full text of the adopted Law on the website of the Verkhovna Rada of Ukraine via the link.