Practical aspects of non-profit status confirmation in Ukraine
One of the main areas of our work, that the last quarter of 2016 will be best remembered for, is undoubtedly the introduction of amendments to the charters of non-profit organizations - non-governmental organizations and charitable foundations.
As we have already written before, in accordance with the Resolution of the Cabinet of Ministers of Ukraine No. 440, dd. 13.07.2016, all operating non-profit organizations as of January 01, 2017 shall obtain a new non-profitability attribute, in other words, they have to confirm their non-profit status. The fate of those who do not gain the understanding of new requirements and do not take the appropriate actions will be decided by the State Fiscal Service of Ukraine in 2017, and it will surely decide to remove the organization from the Register of Non-Profitable Organizations of Ukraine.
Our company has registered more than 50 non-governmental organizations and charitable foundations in the last few years. In the majority of cases, the organizations registered by us, which at the moment continue carrying out their activities, have also contacted us to bring their activities in line with the requirements of the Resolution No. 440.
Depending on the registration date of the organization, the obtainment of a new non-profitability attribute may be carried out under a simplified or regular procedure. Organizations registered after mid-2015, providing that they used the services of professional lawyers, already have provisions in their charters that confirm their non-profit status. These provisions were introduced due to the changes to the Tax Code in mid-2015. Such organizations have only to submit an application to the fiscal authorities at the place of registration together with a copy of their charter. Of course, in practice, it is necessary to monitor the application review process, as high workload of officials often leads to unreasonable refusals to confirm the non-profit status or to a significant delay in the documents review process.
But the organizations registered before 2015 or those that saved on qualified legal services will be faced with much more challenging procedure. Before they can apply to the State Fiscal Service of Ukraine, they need to amend their charters. This involves not only an additional expenditures in the amount of about UAH 500 of the official fee, but also an additional host of emotions due to the need to communicate with registration service officials. If there is already a need to make changes to the charter, it is also advisable to register other decisions of the organization that have long been adopted, but haven’t been registered yet - the change of the business address of the organization, changes in the structure of the governing body, and so on.
In order to properly gain insight on the issue, first of all, it is necessary to thoroughly analyze the constituent documents of the organization - perhaps you can save time and money and don’t need to amend the charter of your non-governmental organization or charity foundation.
But anyway, any problems can be successfully addressed at minimum expense, providing that you entrust the work to professionals.