CFC stands for Controlled Foreign Corporation. CFC Rules prevent the diversion of profits from a parent or controlling corporation to its foreign CFC in a jurisdiction with low or no taxes. The rules operate by attributing untaxed income to the parent or controlling corporation for tax purposes. For legal entities, CFC Rules are mandatory for EU Member States, while for natural persons, they are only recommended. They were established as a global initiative of the OECD and the EU, and form part of tax law in the UK and USA.

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