Head of real estate and commercial law practice
Specialist in the field of commercial law and process. Real estate, construction support; land law and protection of property ownership.
Return of refundable financial aid
Repayable financial assistance is essentially a type of loan and one of the ways to replenish the company’s working capital. It is enshrined in the Tax Code of Ukraine and is not considered a company’s income. The company must repay the repayable financial assistance within the time period specified in the contract and in the manner directly provided for by it. To learn more, we recommend that you read the article below.
What is repayable financial assistance?
Repayable financial assistance (according to the Tax Code of Ukraine) is funds received by an enterprise for use under a loan agreement that does not provide for the accrual of interest. Such assistance is subject to mandatory repayment, and such actions will be considered proper fulfillment by the enterprise of its obligations. It must also meet a number of criteria:
- first, be provided free of charge;
- second, be formalized in a loan agreement or similar;
- third, not be taxed as income of the enterprise.
Who can conclude an agreement on the provision of repayable financial assistance?
Such an agreement is concluded between a company and a founder (director), another company or an individual, respectively. Its main condition, in accordance with Article 1046 of the Civil Code of Ukraine, is that:
- the lender transfers the borrower’s funds into ownership;
- the borrower undertakes to return the same amount of funds within the period specified in the agreement.
Important to know! In order for the signing of an agreement on the provision of repayable financial assistance between a company and its director (who is also its signatory in accordance with the Charter) not to be qualified as “signing an agreement with oneself”, this must be done either through another person authorized by the company or by issuing a decision of the general meeting.
The agreement must contain the following conditions for the parties:
- repayment period – a specific period (if not, it is considered that the loan must be returned within 30 days from the date of the lender’s submission of the relevant requirement);
- the method of return – occurs similarly to its receipt (by transfer to a bank account or cash deposit in the lender’s cash desk);
- the procedure for action in case of non-return – inclusion of the entire amount of refundable financial assistance in income within a year from the date of receipt.
Return of refundable financial assistance through the cash desk or to a person’s card: what are the features?
The return of such assistance has key features depending on the method, related to the specifics of the calculations. These include:
- firstly, limits during the day (up to 50,000 UAH in cash for 1 day, if returned in cash);
- secondly, mandatory execution of an expenditure cash order (if the return is made through the cash desk of the enterprise);
- thirdly, the correct purpose of the payment is important, for example (for example, the return of refundable financial assistance according to Loan Agreement No. 1/10-25 dated 07.10.2025).
It is worth emphasizing that the refund must be made in the manner specified in the contract. The moment of refund in accordance with national legislation will be considered the moment of crediting the amount to the bank account of the founder (director). For more detailed information, we suggest ordering a consultation with our qualified lawyer.
Delay in refunding financial assistance: what are the consequences for the company?
Delay in repayment can have serious tax and legal consequences. The key tax risk is associated with its transformation into a non-refundable aid and automatic taxation as an enterprise’s income on a single tax. Depending on the tax group in which the business entity is located, there are different terms for including such an amount of funds in income:
- 1 year – for the simplified system;
- 3 years – for the general system, respectively.
In addition to the above, the contract itself may provide for liability – penalties.
Legal assistance in cases of granting and returning refundable financial assistance: what do we offer?
Comprehensive legal assistance from the company “Prikhodko and Partners” will protect you from the risks of a business transaction, shortcomings in the preparation of documents, problems with tax, respectively. Our lawyers in the field of business law offer the following services:
- consultations on choosing the optimal model of providing assistance;
- clarification of tax consequences;
- preparation of individual loan agreements (providing refundable financial assistance);
- support in concluding and signing the agreement;
- preparation of all accompanying documents (minutes of general meetings, orders, etc.);
- representation of the interests of both the lender and the borrower in the case of collecting refundable financial assistance;
- defense in court in the event of a dispute between the founder and the company.
Would you like to ask a question to a lawyer? We suggest filling out the form below, ordering a consultation, and finding out the cost of his services in the case of returning refundable financial assistance.
Calculate the cost of services
1 question
Are you the founder/director of the company?
2 question
Do you need assistance in drafting an agreement for the provision of repayable financial assistance to a business?
3 question
Do you need legal support in a commercial court case?
Is a subscriber form of service possible to quickly resolve issues as they arise?
Yes, of course, we take companies for permanent support.
The subscription form of service allows you to receive a full range of legal services on an ongoing basis for a fixed monthly fee.
Our lawyers will accompany all economic legal relations of your company: from drawing up contracts and solving corporate issues to representing interests during inspections by regulatory bodies and in court disputes.
We have very flexible pricing, so contact us and we will discuss your specific case.
Do you work only in Kyiv?
Fortunately, modern technologies allow us to effectively solve almost any legal issue online regardless of your location. In cases where personal presence is necessary, our lawyers are ready to travel to any point in Ukraine. Moreover, thanks to our network of reliable partners abroad, we can provide legal support even in international cases. Our goal is to provide you with quality legal assistance wherever you are.
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