Accounting of charitable assistance in 2024

Due to the full-scale invasion, the issue of charitable assistance becomes especially urgent. Many enterprises and organizations take an active part in providing such assistance, but there are questions regarding the correct registration and accounting.

Definition of charitable assistance

Charitable aid is voluntary non-refundable aid in the form of funds or property provided by benefactors to recipients of charitable aid. It is important to distinguish between charitable and humanitarian aid. Humanitarian aid is a type of charity and should be directed in accordance with the circumstances, objective needs, and consent of its recipients and under the conditions of emergency situations.

How to correctly draw up documents for charitable assistance

The main documents that need to be issued:

• The manager's order on the provision of charitable assistance
• Act of acceptance and transfer of charitable assistance
• Bill of lading (in case of transfer of goods)
• Payment order (when transferring funds)

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All primary documents must contain mandatory details in accordance with the law:

• Name of the document
• Date and place of assembly
• The name of the company on behalf of which the document was drawn up
• Content and scope of the business transaction
• The unit of measurement of an economic transaction
• Positions of persons responsible for carrying out the operation
• A personal signature or other data that makes it possible to identify the person who participated in the transaction.

Accounting of charitable assistance

Sub-account 48 "Targeted funding and targeted revenues" is very important for BO accounting. The BO can open sub-accounts for approved targeted charity programs or donors. We would like to remind you that according to clause 17 of NP(S)BO 15 "Income", the received targeted funding is recognized as income during those periods in which expenses related to the fulfillment of the conditions of targeted funding are incurred. Account 92 and sub-account 949 are usually used to account for expenses.

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Tax accounting of charitable assistance

The presence of a non-profit status does not exempt a charitable organization from paying other taxes, such as:

1. Personal income tax, income tax, social security tax - in the event that labor relations arise between the fund and its employees;\
2. VAT - if the organization supplies goods and services on the territory of Ukraine, which are subject to taxation in accordance with current legislation.

Receipts of funds are not subject to income tax, provided they are properly documented.

Reporting

The timeliness and correctness of reporting are among the elements that testify to the transparency and legality of the organization's activities.

The main tax reports are:

1. The report on the use of profits (income) of a non-profit organization is submitted to the DPS once a year.
2. Financial reporting (abbreviated form of balance sheet and report on financial results).

Importantly! A lack of activity does not mean no reporting. In the absence of transactions, the fund submits a report with empty terms.

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Tips for effective accounting of charitable assistance

• To carry out permanent control over the income and expenses of the fund
• Create templates of required primary documents
• Keep detailed analytical records by types of aid and directions of its use
• Consult with specialists regarding the tax nuances of charitable activities
• Follow the changes in the legislation regarding the accounting and taxation of charitable assistance

Correct accounting of charitable assistance not only ensures transparency of your company's activities but also helps to effectively manage charitable resources, avoiding possible risks and errors.

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