NGO board members in Ukraine: are they officers and when can they be paid?

Membership of the board of a Ukrainian public organisation (NGO) or charitable foundation is not, in itself, a job and gives no right to a salary. The law allows an NGO to pay its officers only as remuneration for work, that is, under an employment contract with an order and notification to the tax authority; any other benefit to members of governing bodies conflicts with non-profit status.

The question arises in many NGOs: the board chair in fact works full time, board members run projects, and the grant budget includes a paid director. The Law on Public Associations does not define which members of governing bodies are officers, so the answer depends on the statute and on whether there is an employment relationship. Below we set out what the laws say directly and how to document it so that the State Tax Service (STS), the donor and the auditor have no questions.

What has changed and what the law says

There is no specific rule on paying board members. The answer comes from several provisions that should be read together.

• Law on Public Associations, Article 3(6). The principle of no proprietary interest: an association’s income or property is not distributed among members and may not be used for the benefit of an individual member or officers, except for remuneration of their work and social contributions. Text of the law: zakon.rada.gov.ua.
• The same law on the statute. The statute defines the powers of the head, the supreme governing body and other governing bodies, how they are formed and their term of office. The law does not define the term “officer” itself.
• Law on Charitable Activity and Charitable Organisations, Article 11. The purpose of a charitable organisation may not be to earn and distribute profit among founders, members of governing bodies, related persons and employees. Employees are covered by labour and social insurance law. Text of the law: zakon.rada.gov.ua.
• The same law, Articles 19, 21, 22. The governing bodies of a charitable society or foundation are the general meeting, the executive body and the supervisory board. Supervisory board members may not sit on the executive body.
• Articles 23 and 24 of the same law. A member of a governing body does not vote on transactions or disputes with themselves or a related person, may not receive loans or credit from the organisation, and may not be a beneficiary of its charitable programmes. Members of a governing body are jointly liable for losses caused by breaches of the law.
• Tax Code, Article 133.4.1. The founding documents of a non-profit organisation must prohibit distributing income among founders, members, employees (except remuneration and the unified social contribution), members of governing bodies and related persons.

Who is affected

• public organisations and unions where the chair or board members in fact work for the organisation;
• charitable foundations and societies where the executive body is remunerated;
• grant-funded NGOs whose budgets include a director or coordinator post held by a board member;
• all organisations registered as non-profit: Article 133.4.1 of the Tax Code applies to each of them.

What to do and by when

This review is best done before year-end and before the project audit.

1. Re-read the statute: does it define the governing bodies, the head’s powers and how the head is elected, and does it contain the income distribution ban in the wording of Article 133.4.1 of the Tax Code?
2. List members of governing bodies and their related persons. Match the list against all payments for the year: salaries, contracts, reimbursements, assistance.
3. If a board member is paid for work, check that there is an employment contract, an order and a notification to the tax authority before the first working day. Under Article 24 of the Labour Code, the person may not start work without these.
4. If a board member works as a FOP or under a civil-law contract, make sure the decision was taken without their vote, the price is justified and the acts describe a specific result.
5. Check that no member of a charity’s governing body received loans or was a beneficiary of its programmes.
6. For grant-funded posts, keep selection documents and timesheets to show the donor that work, not membership, was paid for.

Common mistakes and risks

• “Board remuneration” by decision of the general meeting. Without employment this is not remuneration for work but a benefit to a member of a governing body, which puts non-profit status at risk. We explain how to avoid this in how not to lose non-profit status.
• The chair works without an order. The person runs the organisation every day, but there is no employment contract or notification to the tax authority. Besides tax issues, Article 265 of the Labour Code sets a fine for letting someone work without formalised employment.
• The chair signs a FOP contract with themselves. In a charity, a member of a governing body does not take part in a decision on a transaction with themselves. For NGOs we recommend applying the same rule through the statute.
• A loan to a board member. For a charity this is expressly prohibited by Article 23 of the Law.
• A grant post filled without competition. A donor may ask why a paid role went to a board member. The answer should be in the selection documents, not in verbal explanations.

For this year’s non-profit status requirements, see non-profit status in 2026.

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How we help

We keep accounts for NGOs and foundations, review the statute and payments to related persons before a tax inspection or audit, and carry out NGO audits at a donor’s request. See NGO accounting, NGO audit and grant audit. We cover governance and non-profit status in our free webinars for NGOs.

Prepared by the MK Audit team