{"id":3924,"date":"2026-09-06T20:44:02","date_gmt":"2026-09-06T17:44:02","guid":{"rendered":"https:\/\/audit-mk.com.ua\/zvit-pro-vykorystannia-dokhodiv-npo\/"},"modified":"2026-09-06T20:44:02","modified_gmt":"2026-09-06T17:44:02","slug":"zvit-pro-vykorystannia-dokhodiv-npo","status":"publish","type":"post","link":"https:\/\/audit-mk.com.ua\/en\/zvit-pro-vykorystannia-dokhodiv-npo\/","title":{"rendered":"Non-Profit Income Use Report in Ukraine: Who Files, Deadlines, Common Mistakes, Penalties"},"content":{"rendered":"

<\/p>\n

Every organisation listed in the Ukrainian Register of Non-Profit Institutions and Organisations reports once a year to the tax authority on where its money came from and how it was spent. A dedicated form exists for this: the Report on the Use of Income (Profits) of a Non-Profit Organisation. For NGOs it replaces the corporate income tax return and, at the same time, confirms that the organisation still qualifies for non-profit status.<\/p>\n

In practice this report raises more questions than any other filing among accountants of civic associations, charitable foundations, religious organisations and homeowner associations. The form is short, but mistakes are expensive: from a fine for late filing to removal from the Register and assessment of corporate income tax.<\/p>\n

In this article the team of MK Audit, which has supported non-profit organisations for more than 20 years, answers the key questions: who must file, when, how to complete the main lines, which mistakes are most common and what the consequences of non-compliance are.<\/p>\n

Who must file the report<\/h2>\n
The obligation to file the Report on the Use of Income (Profits) follows from clause 133.4 of the Tax Code of Ukraine. It applies to every organisation included in the Register of Non-Profit Institutions and Organisations, including:<\/p>\n
\n
civic associations, political parties, creative unions;<\/li>\n
charitable organisations and foundations;<\/li>\n
religious organisations;<\/li>\n
homeowner associations, housing and garage cooperatives;<\/li>\n
trade unions and their associations, employer organisations;<\/li>\n
budget-funded institutions;<\/li>\n
agricultural service cooperatives and other legal entities whose activities meet the requirements of clause 133.4 of the Tax Code.<\/li>\n<\/ul>\n
The report is filed regardless of whether the organisation was active during the year. Even with no income and no expenses, the tax authority expects a form with zero figures together with the financial statements. The only exception: organisations that have lost their non-profit status report as ordinary corporate income tax payers from the date of removal from the Register.<\/p>\n
Deadline and format<\/h2>\n
The reporting period for non-profit organisations is the calendar year. The report is due within 60 calendar days after the end of the reporting year, which in practice means by approximately 1 March of the following year. If the last day falls on a weekend or public holiday, the deadline moves to the next business day.<\/p>\n
The form is approved by an order of the Ministry of Finance of Ukraine and is updated from time to time, so before completing it check that your reporting software or the taxpayer’s electronic cabinet uses the current version.<\/p>\n
Financial statements are filed together with the report. For most NGOs these are the simplified forms: the Balance Sheet and the Income Statement (forms 1-m and 2-m, or 1-ms and 2-ms, depending on the size of the organisation). The financial statements are an annex to the report, and without them the report is considered filed in breach of the rules.<\/p>\n
Different deadlines apply in a few cases:<\/p>\n
\n
if the requirements of clause 133.4 are breached (misuse of funds, distribution of income to founders), the report covers the period from the beginning of the year to the end of the month of the breach and is filed within the deadline set for a monthly reporting period;<\/li>\n
on liquidation or reorganisation the report is filed for the last reporting period;<\/li>\n
newly created organisations added to the Register during the year report for the period from the date of inclusion to the end of the year.<\/li>\n<\/ul>\n
How to complete the main lines<\/h2>\n
The report has two main parts: income (receipts) and expenses. All figures are taken from the accounting records, in hryvnias, on a cumulative basis for the year.<\/p>\n
Part I. Income<\/h3>\n
This part shows the organisation’s main sources of funding on separate lines:<\/p>\n\n\n\n\n\n\n\n\n\n\n
Income group<\/th>\n What to include<\/th>\n<\/tr>\n<\/thead>\n
Non-refundable financial aid, voluntary donations, charitable contributions<\/td>\n Cash and property received from individuals and legal entities with no obligation to repay<\/td>\n<\/tr>\n
Grants, including international technical assistance<\/td>\n Restricted funding from donors under grant agreements<\/td>\n<\/tr>\n
Membership and admission fees<\/td>\n Contributions of members of civic associations, cooperatives, homeowner associations<\/td>\n<\/tr>\n
Passive income<\/td>\n Deposit interest, dividends, royalties, exchange differences<\/td>\n<\/tr>\n
Income from core activities<\/td>\n Proceeds from goods, works and services within the statutory purpose<\/td>\n<\/tr>\n
Other income<\/td>\n Everything not covered by the lines above<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
Total income is shown on the summary line of Part I. It should agree with the Income Statement; where there are differences, they must be explainable and documented (for example, a timing difference in recognising restricted funding).<\/p>\n
Part II. Expenses<\/h3>\n
Expenses are grouped by purpose: salaries and payroll charges, goods and services purchased for statutory activities, charitable aid to third parties, administrative costs, grant project costs. The core principle: every expense must relate to the organisation’s statutory purpose. Management and administration costs also qualify as statutory if they are justified and do not amount to a hidden distribution of income.<\/p>\n
Humanitarian aid<\/h3>\n
Organisations that receive humanitarian aid also complete a separate annex detailing aid received and distributed. This annex is reviewed with particular care, so the figures must match the handover certificates and the reports submitted to the relevant authorities.<\/p>\n
Common mistakes<\/h2>\n
\n
Mismatch between the report and the financial statements.<\/strong> The most frequent reason for tax authority queries. Reconcile the totals with form 2-m or 2-ms before filing.<\/li>\n
Wrong classification of income.<\/strong> A grant is shown as non-refundable financial aid, membership fees as other income. This does not always lead to a fine, but it distorts the picture and raises questions during inspections.<\/li>\n
Report without financial statements.<\/strong> A report without its annexes is considered filed in breach of the rules.<\/li>\n
No report for a year with no activity.<\/strong> Organisations wrongly assume that zero figures mean no filing is needed.<\/li>\n
Expenses unrelated to statutory activities.<\/strong> For example, financial support to founders or payment of the director’s personal expenses. This is no longer a form error but grounds for losing non-profit status.<\/li>\n
Inconsistency with grant reports.<\/strong> The donor sees one set of figures in the project financial report, the tax authority another. A grant audit<\/a> reveals such discrepancies immediately.<\/li>\n<\/ol>\n
Penalties and other consequences<\/h2>\n
Liability for failure to file or late filing is set out in Article 120 of the Tax Code. The fine is UAH 340 for each failure and UAH 1,020 for a repeated breach within a year. An administrative fine may also be imposed on officers for breaching tax accounting rules.<\/p>\n
A far more serious risk is loss of non-profit status. If the tax authority finds that the organisation used funds outside its statutory purpose or distributed income to its members, it is removed from the Register. The consequences:<\/p>\n
\n
corporate income tax is assessed on the amount of the misused funds;<\/li>\n
from the first day of the following month the organisation becomes an ordinary corporate income tax payer;<\/li>\n
re-entry into the Register is possible only after the breaches are remedied and under a separate procedure.<\/li>\n<\/ul>\n
That is why we recommend going beyond formal completion of the form and reviewing the whole NGO accounting system once a year. Comprehensive accounting services for non-profit organisations<\/a> at MK Audit include preparing and filing this report and reconciling it with the financial statements and grant reports.<\/p>\n
Practical advice from auditors<\/h2>\n
\n
Keep separate analytical records for each source of funding: it simplifies both the report and preparation for a donor audit.<\/li>\n
Set out the policy for recognising restricted funding in your accounting policy order.<\/li>\n
Check your charter: the list of activities must match the actual expenses.<\/li>\n
Retain primary documents for all expenses for at least 1,095 days after filing, and for grant projects for as long as the donor requires.<\/li>\n
If you are unsure how to classify an income item, consult an auditor before filing rather than after a tax authority query.<\/li>\n<\/ul>\n
MK Audit has worked with non-profit organisations since 2000, is listed in the Register of Auditors and Audit Firms (No. 4624) and is a member of DFK International. If you need help with the report, a review of a form already filed or ongoing accounting support, send us a request<\/a>: we will review the task, prepare a commercial proposal and reply within 1 day.<\/p>\n
\n
\n
Do we have to file if the organisation had no income or expenses?<\/summary>\n
Yes. The tax authority expects a report from every organisation in the Register of Non-Profit Organisations regardless of activity. A form with zero figures is filed together with the financial statements.<\/p>\n<\/details>\n
\n
What is the annual filing deadline?<\/summary>\n
Within 60 calendar days after the end of the reporting year. If the last day falls on a weekend or public holiday, the deadline moves to the next business day.<\/p>\n<\/details>\n
\n
What happens if funds are used outside the charter?<\/summary>\n
The organisation is removed from the Register, corporate income tax is assessed on the misused amount, and from the following month it reports as an ordinary taxpayer. It must also file a report for the shortened period and pay the fines.<\/p>\n<\/details>\n
\n
Can an auditor check the report before filing?<\/summary>\n
Yes, this is common practice. The auditor reconciles the report with the accounting records, the financial statements and grant reports and points out discrepancies that can be corrected before filing.<\/p>\n<\/details>\n<\/div>\n
<\/p>","protected":false},"excerpt":{"rendered":"
A practical guide to the Ukrainian non-profit income use report: who must file, deadlines, the structure of the main lines, mistakes that cost organisations their status, and penalties.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[],"class_list":["post-3924","post","type-post","status-publish","format-standard","hentry","category-hranty-npo"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t

Income group<\/th>\n	What to include<\/th>\n<\/tr>\n<\/thead>\n
Non-refundable financial aid, voluntary donations, charitable contributions<\/td>\n	Cash and property received from individuals and legal entities with no obligation to repay<\/td>\n<\/tr>\n
Grants, including international technical assistance<\/td>\n	Restricted funding from donors under grant agreements<\/td>\n<\/tr>\n
Membership and admission fees<\/td>\n	Contributions of members of civic associations, cooperatives, homeowner associations<\/td>\n<\/tr>\n
Passive income<\/td>\n	Deposit interest, dividends, royalties, exchange differences<\/td>\n<\/tr>\n
Income from core activities<\/td>\n	Proceeds from goods, works and services within the statutory purpose<\/td>\n<\/tr>\n
Other income<\/td>\n	Everything not covered by the lines above<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Total income is shown on the summary line of Part I. It should agree with the Income Statement; where there are differences, they must be explainable and documented (for example, a timing difference in recognising restricted funding).<\/p>\n Part II. Expenses<\/h3>\n Expenses are grouped by purpose: salaries and payroll charges, goods and services purchased for statutory activities, charitable aid to third parties, administrative costs, grant project costs. The core principle: every expense must relate to the organisation’s statutory purpose. Management and administration costs also qualify as statutory if they are justified and do not amount to a hidden distribution of income.<\/p>\n Humanitarian aid<\/h3>\n Organisations that receive humanitarian aid also complete a separate annex detailing aid received and distributed. This annex is reviewed with particular care, so the figures must match the handover certificates and the reports submitted to the relevant authorities.<\/p>\n Common mistakes<\/h2>\n \n Mismatch between the report and the financial statements.<\/strong> The most frequent reason for tax authority queries. Reconcile the totals with form 2-m or 2-ms before filing.<\/li>\n Wrong classification of income.<\/strong> A grant is shown as non-refundable financial aid, membership fees as other income. This does not always lead to a fine, but it distorts the picture and raises questions during inspections.<\/li>\n Report without financial statements.<\/strong> A report without its annexes is considered filed in breach of the rules.<\/li>\n No report for a year with no activity.<\/strong> Organisations wrongly assume that zero figures mean no filing is needed.<\/li>\n Expenses unrelated to statutory activities.<\/strong> For example, financial support to founders or payment of the director’s personal expenses. This is no longer a form error but grounds for losing non-profit status.<\/li>\n Inconsistency with grant reports.<\/strong> The donor sees one set of figures in the project financial report, the tax authority another. A grant audit<\/a> reveals such discrepancies immediately.<\/li>\n<\/ol>\n Penalties and other consequences<\/h2>\n Liability for failure to file or late filing is set out in Article 120 of the Tax Code. The fine is UAH 340 for each failure and UAH 1,020 for a repeated breach within a year. An administrative fine may also be imposed on officers for breaching tax accounting rules.<\/p>\n A far more serious risk is loss of non-profit status. If the tax authority finds that the organisation used funds outside its statutory purpose or distributed income to its members, it is removed from the Register. The consequences:<\/p>\n \n corporate income tax is assessed on the amount of the misused funds;<\/li>\n from the first day of the following month the organisation becomes an ordinary corporate income tax payer;<\/li>\n re-entry into the Register is possible only after the breaches are remedied and under a separate procedure.<\/li>\n<\/ul>\n That is why we recommend going beyond formal completion of the form and reviewing the whole NGO accounting system once a year. Comprehensive accounting services for non-profit organisations<\/a> at MK Audit include preparing and filing this report and reconciling it with the financial statements and grant reports.<\/p>\n Practical advice from auditors<\/h2>\n \n Keep separate analytical records for each source of funding: it simplifies both the report and preparation for a donor audit.<\/li>\n Set out the policy for recognising restricted funding in your accounting policy order.<\/li>\n Check your charter: the list of activities must match the actual expenses.<\/li>\n Retain primary documents for all expenses for at least 1,095 days after filing, and for grant projects for as long as the donor requires.<\/li>\n If you are unsure how to classify an income item, consult an auditor before filing rather than after a tax authority query.<\/li>\n<\/ul>\n MK Audit has worked with non-profit organisations since 2000, is listed in the Register of Auditors and Audit Firms (No. 4624) and is a member of DFK International. If you need help with the report, a review of a form already filed or ongoing accounting support, send us a request<\/a>: we will review the task, prepare a commercial proposal and reply within 1 day.<\/p>\n \n \n Do we have to file if the organisation had no income or expenses?<\/summary>\n Yes. The tax authority expects a report from every organisation in the Register of Non-Profit Organisations regardless of activity. A form with zero figures is filed together with the financial statements.<\/p>\n<\/details>\n \n What is the annual filing deadline?<\/summary>\n Within 60 calendar days after the end of the reporting year. If the last day falls on a weekend or public holiday, the deadline moves to the next business day.<\/p>\n<\/details>\n \n What happens if funds are used outside the charter?<\/summary>\n The organisation is removed from the Register, corporate income tax is assessed on the misused amount, and from the following month it reports as an ordinary taxpayer. It must also file a report for the shortened period and pay the fines.<\/p>\n<\/details>\n \n Can an auditor check the report before filing?<\/summary>\n Yes, this is common practice. The auditor reconciles the report with the accounting records, the financial statements and grant reports and points out discrepancies that can be corrected before filing.<\/p>\n<\/details>\n<\/div>\n <\/p>","protected":false},"excerpt":{"rendered":" A practical guide to the Ukrainian non-profit income use report: who must file, deadlines, the structure of the main lines, mistakes that cost organisations their status, and penalties.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[],"class_list":["post-3924","post","type-post","status-publish","format-standard","hentry","category-hranty-npo"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t

How to complete the main lines<\/h2>\nThe report has two main parts: income (receipts) and expenses. All figures are taken from the accounting records, in hryvnias, on a cumulative basis for the year.<\/p>\n

Humanitarian aid<\/h3>\nOrganisations that receive humanitarian aid also complete a separate annex detailing aid received and distributed. This annex is reviewed with particular care, so the figures must match the handover certificates and the reports submitted to the relevant authorities.<\/p>\n

How to complete the main lines<\/h2>\n
The report has two main parts: income (receipts) and expenses. All figures are taken from the accounting records, in hryvnias, on a cumulative basis for the year.<\/p>\n

Humanitarian aid<\/h3>\n
Organisations that receive humanitarian aid also complete a separate annex detailing aid received and distributed. This annex is reviewed with particular care, so the figures must match the handover certificates and the reports submitted to the relevant authorities.<\/p>\n