Lawyer, Head of Judicial Practice of NOBILI Law Firm Meshe Oleksiy
Features of taxation of non-profit organizations
The main normative legal acts regulating the taxation of non-profit organizations are the Tax Code of Ukraine and the Procedure for maintaining the Register of non-profit institutions and organizations, inclusion of non-profit enterprises, institutions and organizations in the Register and exclusion from the Register.
A non-profit enterprise, institution and organization for the purposes of corporate income tax is an enterprise, institution and organization (non-profit organization) that simultaneously meets the following requirements:
1. Formed and registered in the manner prescribed by law governing the activities of the non-profit organization.
2. Its constituent documents prohibit the distribution of income (profits) or part thereof among the founders (participants) of members of such organization, employees (except for remuneration, accrual of a single social contribution), members of management bodies and other related persons.
3. Its constituent documents provide for the transfer of assets to one or more non-profit organizations of the relevant type, other legal entities providing private pension provision in accordance with the law, or crediting to the budget in case of termination of the legal entity (as a result of its liquidation, merger, division, accession or transformation).
4. Entered by the tax inspection into the Register of non-profit institutions and organizations (Register).
Registered institutions and organizations (newly created), which submitted documents in the prescribed manner for entry in the Register during or within 10 days from the date of state registration and which are entered in the Register as a result of consideration of these documents, are considered non-profit organizations from the date of their state registration. .
To be included in the Register, a non-profit organization must submit (or send by mail) to the tax inspection a registration application form 1-RN and certified by the signature of the head or representative of such organization and sealed (if any) copies of constituent documents of the non-profit organization. portals of electronic services), and housing cooperatives submit additional copies of documents confirming the date of commissioning of the completed residential building and the fact of construction or acquisition of such a building by the housing construction (housing) cooperative.
Based on the results of consideration of the registration application and documents, within three working days from the date of their receipt, the tax inspection shall include the non-profit organization in the Register with the appropriate attribute of non-profit.
The following legal entities can be referred to non-profit organizations:
1. Budget institutions;
2. Public associations, political parties, creative unions, religious organizations, charitable organizations, pension funds;
3. Unions, associations and other associations of legal entities;
4. Housing construction cooperatives, country (country construction), horticultural and garage (garage construction) cooperatives (societies);
5. Association of co-owners of an apartment building, association of owners of residential buildings;
6. Trade unions, their associations and trade union organizations, as well as employers’ organizations and their associations;
7. Agricultural service cooperatives, cooperative associations of agricultural service cooperatives;
9. Other legal entities.
The sign of non-profitability of the organization is assigned to individual groups, according to the following structure:
(0031) – budgetary institutions;
(0032) – public associations;
(0033) – political parties;
(0034) – creative unions;
(0035) – religious organizations;
(0036) – charitable organizations;
(0037) – pension funds;
(0038) – unions;
(0039) – associations and other associations of legal entities;
(0040) – housing cooperatives;
(0041) – country (country-building) cooperatives;
(0042) – horticultural and garage (garage-building) cooperatives (societies);
(0043) – association of co-owners of an apartment building, association of owners of residential buildings;
(0044) – trade unions, their associations and trade union organizations;
(0045) – employers’ organizations and their associations;
(0046) – agricultural service cooperatives;
(0047) – cooperative associations of agricultural service cooperatives;
(0048) – other legal entities.
Non-profit organizations are not payers of income tax.
Revenues (profits) of a non-profit organization are used exclusively to finance the costs of maintaining such a non-profit organization, the implementation of the purpose (goals, objectives) and activities defined by its constituent documents.
The income of non-profit religious organizations is also used to carry out non-profit (charitable) activities provided by law for religious organizations, including the provision of humanitarian aid, charitable activities, charity.
In case of non-profit organization’s non-profit requirements, such non-profit organization is obliged to submit a report on the use of income (profits) of the non-profit organization for the period from the beginning of the year to the last day of the month in which the non-profit requirements were violated. income tax liabilities.
The tax liability is calculated based on the amount of the transaction (s) of misuse of assets. Such a non-profit organization shall be excluded by the controlling body from the Register and shall be considered a payer of income tax for tax purposes from the first day of the month following the month in which the violation was committed.
From the next tax (reporting) year, such a non-profit organization submits a tax return on income tax and financial statements and pays income tax in the manner prescribed for income taxpayers.
Also, the establishment by the tax inspection of the fact that the non-profit organization uses income (profits) for purposes other than statutory, the tax inspection also excludes the non-profit organization from the Register and accrues tax liability for corporate income tax, penalties and fines.
Meshe Alexey,
Head of case law, lawyer
UK Nobili