Controlled foreign companies in the digital economy: current tax challenges and regulatory prospects

Abstract

The article examines the importance and relevance of controlled foreign companies in the context of the digital economy, in particular their role in tax regulation and impact on the economic development of ukraine. the increasingly widespread use of internet technologies, global digital platforms and services contributes to an increase in the number of international business structures, among which controlled foreign companies occupy one of the leading places. The paper argues that such companies can become an effective tool for attracting investment, optimizing business processes and entering Ukrainian businesses into global markets. At the same time, there are a number of risks associated with the unscrupulous use of controlled foreign companies to evade taxes or erode the tax base. The key factors influencing the use of controlled foreign companies are analyzed, in particular the financial and legal infrastructure of the state, the transparency of business processes and legislative restrictions. It is shown that in the digital age, there is a growing need to improve the national tax system and form clear regulatory rules that will meet high international standards and at the same time promote the development of innovative sectors. Considerable attention is paid to the analysis of modern technological trends, including cryptocurrencies, blockchain and artificial intelligence systems, which create new opportunities, but also increase the complexity of detecting and controlling transactions. The article offers a systematic review of modern practices of using controlled foreign companies in the digital economy, and also identifies the main challenges facing tax regulation in Ukraine. On this basis, specific recommendations are substantiated for adapting domestic legislation to the conditions of the digital economy, including ideas for creating a digital tax platform and adopting special norms on transactions with digital assets. It is concluded that a comprehensive approach based on international experience, transparency and technological development can ensure the effective use of controlled foreign companies for the benefit of the national economy.