Non-Profit Status in Ukraine in 2026: How to Obtain It, Keep It and What to Do If You Are Removed from the Register

Non-profit status (in Ukrainian practice, the “non-profit attribute”) allows a civil society organisation, charitable foundation, condominium association, religious community or other non-profit entity not to pay corporate income tax on the funds it receives. The status does not arise automatically upon state registration: the organisation must be entered in the Register of Non-Profit Institutions and Organisations, and for that its charter must comply with clause 133.4 of the Tax Code of Ukraine.

In 2026 the rules remain broadly the same as those introduced into the Tax Code in 2015, but the practice of the tax authorities has become stricter: they check not only the wording of the charter but also the actual use of funds, including grants and humanitarian aid. This article explains how to obtain non-profit status, how to keep it, what to report and what to do if your organisation is removed from the Register. It draws on the experience of MK Audit, which has supported non-profit organisations for over 20 years.

What non-profit status gives you and who is eligible

An organisation with non-profit status is not a corporate income tax payer. Membership fees, grants, charitable donations, humanitarian aid and passive income (interest, exchange differences) are not taxed, provided they are used for the organisation’s statutory activities. For donors, the status is often a mandatory condition of funding.

Under clause 133.4 of the Tax Code, the following may qualify as non-profit organisations, among others:

• budget-funded institutions;
• civil society organisations, political parties, creative unions, religious organisations;
• charitable organisations;
• pension funds;
• condominium associations and housing cooperatives;
• trade unions, their associations and employers’ organisations;
• agricultural service cooperatives;
• other legal entities whose activities meet the requirements of this clause.

The key words are “meet the requirements”. The legal form alone does not guarantee the status.

Charter requirements under clause 133.4 of the Tax Code

Sub-clause 133.4.1 sets four conditions that a non-profit organisation must meet simultaneously:

1. it is established and registered in the manner prescribed by the law governing that type of non-profit organisation;
2. its founding documents prohibit the distribution of income (profit) or any part of it among founders (participants), members, employees (other than remuneration and social security contributions), members of governing bodies and other related persons;
3. its founding documents provide that, upon termination of the legal entity (liquidation, merger, division, accession or transformation), its assets are transferred to one or more non-profit organisations of the same type, to legal entities providing private pension services, or to the state budget;
4. it is entered in the Register of Non-Profit Institutions and Organisations.

In addition, under sub-clause 133.4.2 the income of a non-profit organisation must be used exclusively to finance its operating costs and to pursue the purpose, objectives and areas of activity defined in its founding documents. The Tax Code provides exceptions for certain types of organisations: for example, the asset transfer requirement does not apply to associations of condominium associations, and special provisions apply to religious organisations.

How to check your charter

In practice we recommend checking three things. First, whether the charter contains an explicit prohibition on income distribution worded close to the text of the Tax Code, rather than a general phrase such as “the organisation does not aim to make a profit”. Second, whether it states who receives the assets upon termination: wording such as “property is distributed among members” or “used at the discretion of the general meeting” is grounds for refusal. Third, whether other internal documents contradict the charter, for example a membership policy that provides for refunds of contributions. If the charter was adopted before 2015 and has not been amended since, it almost certainly needs updating.

How to obtain non-profit status: step by step

The procedure for maintaining the Register of Non-Profit Institutions and Organisations is approved by a resolution of the Cabinet of Ministers of Ukraine. It consists of several steps:

1. Prepare a charter that complies with clause 133.4 and register the organisation, or the amendments to the charter, with the state registrar.
2. Complete registration application Form 1-RN. It states the organisation’s details and the type of non-profit organisation, which determines the status code.
3. File the application with the tax authority at the organisation’s principal place of registration. This can be done together with state registration through the state registrar, electronically via the taxpayer’s electronic cabinet, or in person. Copies of founding documents are attached unless they are already published in the Unified State Register.
4. Wait for the decision. The tax authority reviews the application within three working days and decides to enter the organisation in the Register or to refuse.
5. Verify the Register entry. The Register is public and can be checked on the State Tax Service website. The date of entry determines from when the organisation is exempt from corporate income tax.

Step	Performed by	Indicative timing
Bringing the charter into compliance	Organisation, lawyer	Depends on the procedure for convening the general meeting
State registration of amendments	State registrar, administrative service centre	Usually within 24 hours of filing
Filing Form 1-RN	Organisation	On the day of registration or later
Review of the application	Tax authority	3 working days

If the application is refused, the tax authority states the reason, most often non-compliant charter provisions. Once the deficiencies are corrected, the application may be filed again; there is no limit on the number of attempts.

How to keep your non-profit status

Obtaining the status is easier than keeping it. Non-compliance with any requirement of clause 133.4, whether in form (the charter) or in substance (the use of funds), is grounds for removal from the Register. Here is what tax inspectors focus on:

• Payments to founders, members and related persons beyond remuneration: financial assistance to board members, loans to founders, renting property from a member at an inflated price, selling the organisation’s assets to a founder below market value.
• Expenses unrelated to statutory activities: for example, paying for staff training or leisure if neither the charter nor the donor agreement provides for it.
• Commercial activity. A non-profit organisation is not prohibited from selling goods or services, but the income must be directed exclusively to its statutory purpose, and the activity itself must be provided for in the founding documents.
• Charter amendments. After state registration of amendments to the founding documents, the organisation must file a registration application marked as an amendment with the tax authority within the period set by the Register procedure. If the new version of the charter has lost the mandatory provisions, the organisation will be removed from the Register.
• Failure to file reports. Systematic failure to file the income use report is also grounds for a tax authority enquiry and, ultimately, for removal.

The most reliable safeguard is to define in your accounting policy which expenses count as statutory, to agree unusual transactions with your accountant before they happen, and to review the use of funds annually. This is one of the objectives of the grant and project audits we perform both for donors and for the organisations themselves.

Reporting by a non-profit organisation

Non-profit status does not exempt an organisation from reporting. The main forms are:

• Report on the use of income (profit) of a non-profit organisation. Filed once a year, within 60 calendar days after the end of the reporting year. It shows all receipts by type (contributions, grants, charitable aid, humanitarian aid, passive income) and their use.
• Financial statements. Filed together with the income use report. Most organisations apply National Accounting Standard 25 and file a condensed balance sheet and income statement.
• Payroll reporting. The combined report on personal income tax, military levy and social security contributions is filed quarterly if the organisation has employees or pays income to individuals, including charitable assistance.
• VAT return, if the organisation is registered as a VAT payer.
• Statistical reports and, where humanitarian aid is received, the reports of a humanitarian aid recipient.

The income use report must agree with the financial statements and the accounting records. Discrepancies between them are one of the most common triggers for a tax enquiry. If the organisation lacks an in-house accountant familiar with the non-profit sector, it makes sense to outsource this function to accounting services for NGOs.

What to do if you are removed from the Register

The consequences of removal are set out in sub-clauses 133.4.3 and 133.4.4 of the Tax Code. An organisation that has breached the requirements must file an income use report for the period from the beginning of the year (or from the date it was recognised as non-profit, if later) to the last day of the month in which the breach occurred, and pay the self-assessed corporate income tax liability. The tax is calculated on the amount of the transaction involving misuse of assets. From the first day of the month following the breach, the organisation becomes a corporate income tax payer on general terms.

What to do after removal:

1. Establish the grounds. Obtain the tax authority’s decision and, if the removal followed an inspection, the inspection report.
2. Assess the prospects of an appeal. The decision may be appealed administratively to the higher-level tax authority within the period set by the Tax Code, or in court. This makes sense if you believe there was no breach.
3. Remedy the breach. If the problem lies in the charter, amend and register it. If it lies in the use of funds, document the refund or compensation.
4. Reapply. Once the breach is remedied, the organisation may file Form 1-RN again. Re-entry takes effect from the date of the new decision, and the period outside the Register must be closed with a corporate income tax return.
5. Notify your donors. Many grant agreements oblige the recipient to inform the donor of a change in tax status.

The worst-case scenario is an organisation learning about its removal a year later, when it receives an enquiry or an inspection report assessing tax on all grants for that period. We therefore recommend checking your status in the public Register at least once a quarter.

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