NON-PROFIT ACCOUNT FOR CHARITIES, HUMANITARIAN AND ARMY AID

With the beginning of the full-scale war on the territory of Ukraine, the number of charitable organizations and volunteers increased. Almost all of them are registered as charitable or non-profit organizations. Such organizations collect funds, which are later transferred to the Armed Forces. But their public and charitable activities must also be properly formalized. This applies specifically to accounting, taxation and reporting.

First, it is necessary to determine that a non-profit organization is an organization that was created without the purpose of making a profit, its income cannot be distributed among the members or the founder of such an organization.

What can be used to receive income in order not to lose the charter of a non-profit organization?
First of all, the legislation states that a non-profit organization can spend income on its maintenance to realize the purpose for which it was created.
Secondly, it is the provision of charitable and humanitarian aid from the non-profit organization's income.

But there are situations when a non-profit organization can lose its "non-profit" status. What does it threaten?
First of all, the loss of the status of a non-profit organization is threatened by the fact that it will be necessary to submit reports to the tax authorities on the income received by such an organization, as well as pay tax payments on the income received.

It is worth noting that such organizations must maintain accounting and tax reporting on a general basis. Regarding registration as a VAT payer, if the amount of taxable transactions exceeds 1 million hryvnias per year, then such an organization must be registered as a VAT payer, if less, then at the discretion of such non-profit organization.

As for the accounting of humanitarian and charitable aid, it must also be correctly shown in the reporting. The basis for accounting for humanitarian and charitable aid is the primary documents on the basis of which such aid is accepted and transferred.

Non-profit organizations, as well as other legal entities, use the accruals method of accounting (not the "cash" method) with special rules taken into account, including special rules for displaying income from targeted funding.

Another question is how to issue financial assistance to members of a non-profit organization so as not to lose its status? It is worth noting that a non-profit organization is prohibited from distributing income among its members. But at the same time, members of a non-profit organization are allowed to receive wages. That is, in order to pay material assistance to an employee without spending the status of a "non-profit organization", it should be done within the available salary fund.