Can the charitable foundation accept donation in Ukraine in cryptocurrency?

The question of the legal conduct of charitable activities is one of the most frequent legal questions in times of war in Ukraine. Our company is approached both about the creation of charitable foundations, their re-registration, and about the legal receipt and distribution of charitable donations - so that everything would be transparent and legal.

We've already talked about creating a charitable fund in a war situation here. Now let's talk about the most common questions about charitable foundations.

Is it possible to get help and donations in Ukraine in cryptocurrency?

Yes, it is possible. On March 15, 2022, the President of Ukraine signed the law "On Virtual Assets". Thus, cryptocurrency in Ukraine is now legalized. How does it work in practice? The most difficult thing is the conversion of cryptocurrency into regular currency. According to the pioneers, it is easier with Bitcoin and Ethereum. With the lesser-known ones, it can be problematic for now.

One of the well-known foundations found a way out of this situation by fixing some responsible persons for cryptocurrency wallets, who control the proceeds and distribute them among volunteers, converting cryptocurrency into money that everyone is used to, by debiting them to their cards.

Clients already contact us and we develop personal recommendations and instructions for accepting charitable assistance in cryptocurrency in Ukraine.

Peculiarities of distribution of donations for humanitarian problems in circumstances of war.

In times of war, legal requirements for receiving, using, accounting and reporting charitable aid do not apply. Thus, the main feature is the maximum simplicity, for the benefit and without abuse.

However, we would still like to warn against misuse of previously received grants. If you used to receive a certain amount of money for the development of theatrical activity, for example, and now you want to borrow from it to support the army and then pledge - it is not certain that such good intentions will still be regarded as legitimate.

There is no further clarification on this yet. Nevertheless, we can help make the situation clear and calculate the risks to your foundation in advance.

Interesting: Charity and taxes in Ukraine

What percentage of donations can be left for the administrative needs of the foundation itself, how is this regulated?

It is regulated by the Law of Ukraine "About charitable activity and charitable organizations", and its provisions are categorical: administrative expenses of a charitable organization cannot exceed 20% of the organization's income in the current year.

What is income? The income is all the money received during a certain period of time. Therefore, at a minimum, all monetary donations in this context will be considered income.

Can I publish the names of the benefactors on the Charity Foundation Web page?

No problem. Despite the opinion of many that philanthropy should almost be anonymous, the legislation does not require this at all.

Interesting: Accounting for a charitable foundation in Ukraine

What other legal and accounting aspects have to be considered in order to avoid questions from the state agencies and to act as transparently as possible?

Labor relations with employees. If there are employees, labor relations with them should be duly documented, wages and taxes should be accrued on time, and appropriate reports should be submitted.

Of course, in times of war, there are certain deferrals about the deadlines for paying taxes and reports. But the war will end and within a certain period of time, reports must be filed.

Cooperation with volunteers. According to the Law of Ukraine "On Volunteer Activities" there is a list of activities and cases when it is necessary to conclude contracts with volunteers. These include:

• assistance in the elimination of the consequences of emergencies of man-made or natural nature;

• assistance to the Armed Forces of Ukraine and other military formations, law enforcement bodies and state authorities during a special period, legal regimes of emergency or martial law.

In case of involving foreigners in volunteering, contracts of volunteering must be necessarily concluded with them and they must be reported to the Ministry of Social Policy within five days.

Other contractual activities. Contracts for providing charitable assistance, contracts with electronic communication service providers, contracts for renting premises, equipment etc., acts of acceptance and transfer of charitable assistance - these are the things a charitable organization deals with when carrying out its activities, and they must be drawn up correctly.

Our company can help to arrange all the processes of accounting and conducting charitable activity in Ukraine.

We have reviewed the most typical legal and financial aspects of charitable foundations. Naturally, individual situations arise in the course of activity.

If you are interested in the help of a qualified team, we can offer you both consulting services and ongoing legal and accounting services.

We can also develop a step-by-step "road map" of how best to structure your work in your case.

Do you need help in registration and understanding the work of the charitable organization in Ukraine?

Cost and information about registration of different foundations in Ukraine here.

Cost of juridical and accounting support of the activity of charitable foundations in Ukraine here.