By KYIV. Oct 23 (Interfax-Ukraine) – The Union of Ukrainian Entrepreneurs calls on the Verkhovna Rada to postpone the rule on mandatory reporting of controlled foreign companies, which will come into force in 2024, for the period of martial law.
“The introduction of reporting by Ukrainian owners on foreign companies they control will now worsen the business climate in Ukraine,” it said.
The association argues that the reports can be used by unscrupulous law enforcement officers to put pressure on businesses.
“In conditions where unlawful and unmotivated pressure from law enforcement and regulatory authorities is increasingly being recorded, Ukrainian entrepreneurs have lost confidence and have every reason to believe that the disclosure of information will lead to additional pressure,” the statement says.
According to him, the union is also afraid of the Russian Federation’s intelligence services having access to this information.
“Rules on controlled foreign companies in Ukraine are integrally much worse than in many alternative jurisdictions and are a significant obstacle to the acquisition of Ukrainian tax residency by foreign entrepreneurs,” the association added.
Another argument in favor of postponing the introduction of reporting is the significant additional costs of preparing reports in war conditions.
It is clarified that the controlled foreign companies sent the relevant recommendations to the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, which is preparing draft law No. 8137 on amendments to the Tax Code of Ukraine to improve the taxation of controlled foreign companies in a letter dated October 17, 2023.
The association recalled that it had previously achieved a postponement of the introduction of mandatory reporting on controlled foreign companies, so we expect that the government and the Rada will again listen to its position.
