Non-profit status is an entry in the Register of Non-Profit Institutions and Organisations kept by the tax service, with a non-profit code assigned. It exempts the organisation from corporate income tax, including on grants, and is almost always a donor requirement. It can be lost through spending outside the statutory purposes or a non-compliant statute, which puts the grant itself at risk.
A civic organisation does not become non-profit automatically because its name or statute says so. For tax purposes a non-profit is an organisation that simultaneously meets the requirements of paragraph 133.4 of the Tax Code of Ukraine and is entered in the Register of Non-Profit Institutions and Organisations. Until it is entered, it is an ordinary corporate income tax payer, and a grant can become taxable income for it.
The three requirements of paragraph 133.4
- The organisation is formed and registered in the manner set by the law governing its activity.
- The founding documents prohibit the distribution of income or any part of it among founders, members, employees (apart from wages and the single social contribution), members of governing bodies and persons related to them.
- The founding documents provide that on dissolution the assets are transferred to another non-profit organisation of the same type or credited to the budget.
If either of the two clauses is missing from the statute in so many words, the tax office will refuse. The statute is therefore checked against the text of the Code before it goes to state registration.
How to get into the Register
The procedure for keeping the Register is approved by Cabinet of Ministers Resolution No. 440 of 13 July 2016. The organisation files a registration application in form 1-RN with the tax office where it is registered, with copies of the founding documents unless they are published on the electronic services portal. It can be filed in person, by post or electronically. The simpler route is to request inclusion in the Register in the application for state registration of the organisation, in which case no separate application is needed.
Under the current wording of the procedure the tax office decides within three working days. The period was shortened by amendments at the end of 2024, so older guides may give a different figure. An organisation that files during state registration or within 10 days of it and is entered in the Register is treated as non-profit from the day it was created.
The decision states the non-profit code, a four-digit code for the type of organisation: 0032 for civic associations, 0036 for charitable organisations, 0034 for creative unions, 0031 for budgetary institutions. A donor asking for the "non-profit code" means exactly this. Changes to the statute that affect the status are notified to the tax office with an application marked as changes within 10 calendar days.
Why donors require it
For a donor the Register entry is quick proof of three things: the money will not go to founders as dividends, no corporate income tax will be paid out of the grant, and the organisation is under tax supervision as regards the use of funds. An extract from the Register is usually part of the due diligence package and of a capacity assessment, and in regranting programmes its absence is a formal ground for rejecting an application. The Register data are open on the tax service web portal.
What has to be done every year
The income of a non-profit organisation is used exclusively for its upkeep and for the aims and lines of activity set out in the statute. It reports on this by filing a report on the use of income (profits) of a non-profit organisation together with annual financial statements. The reporting period is a year, and the report is due within 60 calendar days after the year ends. It is filed even when there were no receipts.
Grounds for exclusion and what happens to the grant
- Using income for purposes not provided for in the statute. Classic examples: a loan to a founder, paying the director’s personal expenses.
- Distributing income among founders, members or employees beyond wages.
- The organisation or its statute not meeting the requirements of paragraph 133.4.
In the event of a breach the organisation files a report for the period from the start of the year to the end of the month of the breach and pays corporate income tax on the amount of the non-compliant transaction, and the non-profit code is cancelled from the first day of the following month. For a grant the consequences go beyond tax: current agreements often allow the donor to suspend payments, and in new calls the organisation fails the eligibility check. The best protection is separate record keeping for each grant and a rule of checking any unusual expense against the statute before paying.
Updated 11.10.2026 · Reviewed by: GetGrant editorial team
