MainPublications of our law firmComments on legislationNon-profit organizations. Types and regulatory framework in Ukraine

Non-profit organizations. Types and regulatory framework in Ukraine

In spite of types of ownership all legal entities are divided into profitable (entrepreneurial activity, commercial organizations) and non-profitable organizations.

Tax Code Of Ukraine defines a term of a non-profitable organization. Before putting changes into Tax Code non-profitable organizations, companies and institutions were defined as institutions, companies and organizations which have the main target to do charity, patronage and other activities that are not profitable according to the law. Law of Ukraine no. 652 dated the 17th of July 2015 has defined a new edition of this term. According to 14.1.121 article “non-profitable organizations are institutions, companies and organizations which are not payers of corporate tax according to 133.4 article of Tax Code of Ukraine”.

Requirements for non-profitable organizations

133.4.1. article of Tax Code of Ukraine regulates requirements for getting non-profitable status:

  • organization must be established and registered according to laws which regulate activity of non-profitable organizations;
  • organization’s incorporate documents must have prohibition of distribution of profits or their parts among establishers, members, members of management, workers (except their salaries and Single Social Contributions) and other persons;
  • organization’s incorporate documents must have clauses about transferring NGO’s property to one or more similar non-profitable organizations  or transferring property to a state budget in a case of liquidation (merger of organizations, division of organizations, affiliation or reformation of organizations);
  • organization must be included on the Register of non-profitable organizations.

And there is the main requirement about using all their profits only for realization non-profitable organization’s targets according to 133.4.2 article.

Profitable organizations are established only for getting profits and pay corporate tax, non-profitable organizations are established not for getting profits. This is the main difference between these two types. In general non-profitable organizations are established for creating welfare for society and for reaching social targets.

Types of non-profitable organizations

There are such types of non-profitable organizations according to 133.4.6 article:

  • budget institutions;
  • non-governmental organizations, political parties, religious organizations, charitable organizations, creative unions, pension funds;
  • unions and other associations of legal entities;
  • housing-constructive cooperatives (beginning with the first date of month when construction was finished and cooperative buys this house), countryside cooperatives (counry-constructive), gardening and garage cooperative (garage-constructive);
  • associations of owners of apartment buildings, associations of owners of private houses;
  • professional unions and their associations, associations of trade unions, organizations of employees and their association;
  • agricultural cooperatives and their associations;
  • other legal entities which do activity according to 133.4 article of Tax Code of Ukraine.
Every type of non-profitable organizations regulated by its own law.

Type of non-profitable organizations

Regulative laws

Charitable organizations

Law of Ukraine “On charity and charitable organizations” dated the 5th of July 2012

Religious organizations

Law of USSR “On freedom of conscience and religious organizations” dated the 23rd of April 1991

Creative unions

Law of Ukraine “On professional creative workers and creative unions” dated the 7th of October 1997

Non-governmental organizations, political parties, religious organizations, charitable organizations, creative unions, pension funds

Law of Ukraine “On public association” dated the 22nd of March 2012

Countryside cooperatives, gardening and garage cooperatives, housing-constructive cooperatives

Law of Ukraine “On cooperation” dated the 10th of July 2003

Associations of owners of apartment buildings, associations of owners of private houses

Law of Ukraine “On associations of owners of apartment buildings” dated the 29th of November 2001

Professional unions and their associations, associations of trade unions, organizations of employees and their association

Law of Ukraine “On trade unions, their right and guarantees of activity” dated the 15th of September 1999

Agricultural cooperatives and their associations

Law of Ukraine “On agricultural cooperation” dated the 7th of July 1997


Non-profitable organizations don’t calculate corporate tax, don’t submit any declarations and don’t pay it. At the same time non-profitable status doesn’t divest from obligation to submit reports. Non-profitable organizations must submit reports about using their profits according to the procedure which is defined by the law no. 652. The main task of it is controlling exes. If profits are used against targets of organization then organizations must pay corporate tax and be a tax payer.

Non-governmental organizations and charitable organizations are the most common types of non-profitable organizations.

According to the Law of Ukraine “On public association” public association is a voluntary association of individuals or/and legal entities of private law for defeating rights and obligations and satisfaction social, cultural, ecological and other interests. We have written about forms and types of public associations previously. Also there was an article about charter and requirements for it.

Charitable organization is a legal entity of private law which does some charity activity according to the law of Ukraine “On charity and charitable organizations”. It develops own charitable program which has a complex of tasks according to charter’s targets. Charitable organization can be established as a charitable company, a charitable institution or a charitable fund. A charitable fund is a charitable organization which acts according to its charter, has members and is managed by members who are not obliged to transfer any property to organization for reaching charitable organization’s targets.

Contact the author

Any questions left?

Don't waste your time and entrust your legal matters to the team of professionals!

Learn about the price


Related materials

ASK LAWYER A QUESTION

SIDEBAR MENU
RELEVANT EXPERIENCE RELEVANT PUBLICATIONS