Services for controlled foreign companies (CFCs)

Current changes in CFC legislation

On February 15, 2016, the President signed the law (32-FL dated February 15, 2016), introducing significant changes to the rules of taxation of controlled foreign companies (hereinafter - CFC). These changes are generally positive for companies that are subject to CFC restrictions.

One of the most significant changes was the amendment, passed in 01.01.2016, which allowed companies to calculate the tax base of a CFC (CFC profit) established by the data of the audited CFC report, not by the Russian rules established by the Tax Code of the Russian Federation (RF Tax Code).

It is important to emphasize that now this opportunity extends to classic offshore companies - BVI, BELIZE, etc. Cyprus companies also had this opportunity in 2015.

Business implications

The use of data from companies' own audited financial statements creates more favorable and convenient conditions for taxation of CFCs. The key conditions that must be met for the use of reporting are:

If, according to the national legislation of the jurisdiction of the CFC, the audit is mandatory, then it is necessary to prepare audited reports according to the rules (standards) established by the personal law of the respective jurisdiction
If the national legislation of the CFC jurisdiction does not provide a statutory audit (BVI / BELIZE, etc.), then financial statements must be prepared and audited in accordance with IFRS

In both cases, an auditor's report should be presented with respect to the financial statements, which does not contain a negative opinion or a denial of opinion.

What do we offer?

  • We will prepare the reporting of your company (CFC) in accordance with IFRS standards with high quality and short lead time

    Our experts have extensive experience in preparing financial statements in accordance with IFRS: we prepared financial statements for the purposes of initial public offering (IPO) and public companies already listed both on the Moscow Exchange and on international stock exchanges; Together with our clients, we have successfully passed the audit by the «Big Four» companies, and also helped our clients solve the most complex methodological issues under IFRS.

  • We will audit your company's financial statements (CFC) prepared in accordance with IFRS, with high quality and short lead time

    Our specialists have all the necessary qualifications: ACCA certificates and Russian audit certificates, as well as unique experience in auditing companies in various industries: from oil and gas to consumer goods and services. Our clients include public companies. As part of the audit, we help our clients solve complex methodological issues in accounting and tax accounting, while giving recommendations for improving the internal control system.

Our reputation

We are part of the largest international alliance of audit and consulting companies, which gives us the opportunity to attract a partner firm in any country in the world and provide services to our clients in any jurisdiction.

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