Comparative analysis of the definition and rules of controlled foreign corporations in the USA, UK, Poland, and Ukraine

The paper highlights the essence and evolution of the concept of "controlled foreign corporation" (CFC), summarizes and details the OECD recommendations for determining the type of organization eligible for CFC status, and elaborates on the key guidelines for drafting tax legislation to regulate the taxation of CFCs across various jurisdictions. The study systematically reviews OECD methodologies for defining control levels and identifying controlling persons, providing a comparative analysis of CFC rules in the United States, the United Kingdom, Poland, and Ukraine. Special attention is given to differences in national implementations of CFC rules and their alignment with international tax frameworks, such as the OECD BEPS Action Plan and the EU Anti-Tax Avoidance Directive (ATAD). The research highlights the impact of varying control thresholds, corporate structures, and tax treatment of CFC income on tax planning strategies and regulatory compliance. Additionally, the role of transparency measures and anti-avoidance provisions is assessed in mitigating tax base erosion and preventing harmful tax practices. A major focus is placed on Ukraine’s CFC legislation, which was introduced in 2020 and remains in an evolving stage. The paper evaluates its effectiveness in curbing tax avoidance while supporting economic stability in wartime conditions. Key findings suggest that adjusting control thresholds, refining CFC criteria, and enhancing enforcement mechanisms could improve tax revenue collection while maintaining compliance with OECD principles and international best practices. The study concludes by proposing legislative improvements to strengthen Ukraine’s CFC framework, ensuring its role in combating tax evasion and fostering a transparent and stable business environment. These recommendations include stricter monitoring mechanisms, improved enforcement of tax obligations, and alignment with proven regulatory models from other jurisdictions. The insights provided contribute to a deeper understanding of CFC regulations and their broader implications for global tax policy.