On the legitimacy of refusing inclusion in the Register of non-profit organizations

There is an obvious lack of regal regulation for procedure of inclusion into Ukrainian non-profit organizations registry (non-governmental organizations, charitable foundations, cooperatives and other organizations). And this lack causes numerous abuses of power by tax bodies.

One of the most wide-spread reasons for not inclusion into non-profit registry is non-compliance of income with requirements of provisions provided by the article 157 of the Tax code of Ukraine (hereinafter – the Code). The point is that mentioned in charters sources of income are different from ones described in the article.

Tax bodies mostly reckon the position that non-profit organization has right for income only from the sources provided by corresponding paragraph of the 157 article. So the position is that the charter provisions should quote word by word the Code list for possible income sources.

The described understanding of the norms is wrongful.

P. 157.12 of the Code defines that when non-profit organization receives income from sources other than the defined in paragraphs 157.2 - 157.9 of the Code, such an organization is obliged to pay income tax, that is calculated as a sum of income from such sources, reduced by sum of expenses, that are related to obtaining of such income, but not exceeding the amount of such income.

Thus, an organization that is included into the Registry of non-profit organizations is not deprived of the right to perform other activities and obtain an income.

The chances for successful appeal of such decisions are pretty high.

But the most effective way is to re-apply for inclusion in the Register while qualified legal support.

You may find interesting our next article:

Exclusion from the Register of nonprofit organizations.

Legal services of funds and NGOs registration.

Publication date: 17/12/2013
Marina Losenko

About author

Name: Marina Losenko

Position: Associate

Education: National Aviation University

Knowledge of languages: Russian, Ukrainian

Email: [email protected]

Marina Losenko is a lawyer of the company, specializing in corporate law and intellectual property law.

Marina has extensive experience of registration and dissolution of enterprises, charities and non-governmental organizations, representative offices of foreign companies as well as formalization of changes to registration information of the entities.

For quite a long time she has been working in the field of licensing and obtained licenses for different types of business activities including sale of medicines (license for activities of drugstores); wholesale of pesticides and agrochemicals; activities with scrap; activities with hazardous wastes; operations with scrap of precious metals and gemstones; private security services; transportation; tour services; use of redio frequency resource; IPTV services, etc.


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