Maksym Stepanenko
Managing Partner, Crystal Tax
International client projects since 2012: company structures, tax, immigration, DUNS and NCAGE. 50+ jurisdictions.
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How to Carry Out Tax-Free Liquidation of Controlled Foreign Companies (CFC) in Accordance with the Procedure?
Controlled foreign companies can be liquidated without paying taxes based on Law No. 466 of the Tax Code of Ukraine from January 2020. The changes introduced in this law allow the liquidation of offshore companies without tax obligations. Crystal Tax provides services for the liquidation procedure of CFCs registered in any jurisdiction.
Procedure Specifics: How Does Tax-Free Liquidation of CFC Work?
Before 2020, according to legislation, it was required to pay 18 or 9% personal income tax (PIT) when liquidating an offshore company. The changes exempted from this tax, leaving only a 1.5% military fee on undeclared income.
The tax-free liquidation of CFC is based on an application for exemption from income received outside Ukraine, which is submitted together with the tax return. You can refer to subparagraph 170.131 of the Tax Code of Ukraine, which exempts from taxes on income received from a foreign production entity during its liquidation.
The procedure is conducted in two ways:
- voluntary tax-free liquidation of the company;
- re-registration of a foreign company into a Ukrainian one.
In the second option, you should move the controlling body to Ukraine. Taxes received abroad are also not subject to taxation.
Tax-Free CFC Liquidation with Lawyer Support
The specialists at Crystal Tax will provide qualified assistance and services in international law to help you go through the procedure promptly and correctly:
- prepare all necessary financial statements and documentation;
- conduct the procedure in accordance with the voluntary liquidation or re-registration of CFC into a Ukrainian company;
- make the payment for the military fee.
Any other consultations on the CFC liquidation procedure can also be obtained from our lawyers.
Why is Liquidating CFC with Crystal Tax an Effective Solution?
Our company's services will allow you to optimize time and go through the procedure in compliance with the rules to eliminate risks.
Liquidation of CFC with Crystal Tax is:
- legally and in compliance with all legal requirements;
- efficiently and without delays in conducting the procedure;
- comprehensive - our lawyers perform all options and guide your company through all stages to complete liquidation;
- confidential, ensuring safety for you and your business.
The procedure is delicate and has several pitfalls, so the assistance of a professional lawyer is your safety in its conduct.
You can learn more details about the procedure in a consultation; just leave your request on the website or contact us in a way convenient for you, and we will answer all your questions.
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