What does CFC mean in ACCOUNTING
A Controlled Foreign Corporation (CFC) is a foreign corporation with ownership or control ties to shareholders in a different country. CFCs are subject to their home country's taxation laws and must pay income tax on global profits regardless of where they conduct business.
CFC meaning in Accounting in Business
CFC mostly used in an acronym Accounting in Category Business that means Controlled Foreign Corporation
Shorthand: CFC,
Full Form: Controlled Foreign Corporation
For more information of "Controlled Foreign Corporation", see the section below.
» Business » Accounting
Essential Questions and Answers on Controlled Foreign Corporation in "BUSINESS»ACCOUNTING"
What is a Controlled Foreign Corporation (CFC)?
A Controlled Foreign Corporation (CFC) is a foreign corporation that has ownership or control ties to shareholders in another country. It is subject to the home country's taxation laws and must pay income tax on global profits regardless of where it conducts business.
Who owns a CFC?
A CFC can be owned by individual shareholders, corporations, trusts, and other entities from the home country. The shareholders of the CFC are referred to as “controlling persons†because they have power over how the CFC operates.
What kind of taxes does a CFC pay?
A CFC pays income taxes on global profits, regardless of where it conducts business. This means that any profit earned within its jurisdiction should be included in the CFC's taxable income calculation, even if it hasn't been physically repatriated back to the home country yet.
How is a CFC structured?
Most countries structure their corporate tax systems so that CFCs are incorporated as separate legal entities from their controlling persons' other businesses. This way, the activities of one company do not automatically impact the financial performance of another entity under common control within its international tax system.
Are there penalties for not complying with CFC rules?
Yes- each country has specific rules about filing requirements for reporting and paying taxes on global profits generated by its Controlled Foreign Corporations (CFC). Failing to comply with these rules can result in fees and penalties imposed by both domestic authorities and foreign regulators.
Final Words:
Most countries have rules governing the structure and taxation of Controlled Foreign Corporations (CFC). These entities are subject to their home country's taxation laws, which require them to pay income tax on all their worldwide profits regardless of where they conduct business. Understanding these regulations can help companies minimize their international tax exposure while staying compliant with local laws.
CFC also stands for: |
|
| All stands for CFC |