Charity has become an integral part of the life of Ukrainians. However, not everyone knows that funds transferred to support charitable organizations can not only help those who need it, but also give the right to a refund of part of the personal income tax paid. To do this, it is necessary to comply with the requirements of tax legislation, properly draw up supporting documents and submit a declaration in a timely manner. More details below.
Who is eligible for a tax rebate
A tax rebate is a mechanism provided for by law that allows an individual to reduce their annual taxable income by the amount of certain expenses, including charitable contributions. As a result, the taxpayer can receive a refund of a part of the previously paid personal income tax.
This right can be exercised by individuals – residents of Ukraine, who during the reporting year made charitable donations in favor of non-profit organizations and received income in the form of wages.
At the same time, it is important to make sure that at the time of receiving charitable assistance, the organization was included in the Register of Non-Profit Institutions and Organizations. Only under this condition can the relevant costs be taken into account when determining the tax rebate.
What amount of charitable contributions can be taken into account
Tax law sets limits on the amount of charitable expenses that can be included in the tax rebate. The total amount of such contributions and donations may not exceed 4% of the annual taxable income of the taxpayer.
It is within this limit that the amount of expenses is determined, which reduces the annual taxable income and can become the basis for the return of part of the paid personal income tax.
Documentary evidence is a prerequisite
The right to a tax discount must be documented. Therefore, all documents certifying the fact of charitable assistance should be kept.
Confirmation can be bank receipts, payment instructions, bank statements, fiscal or sales checks, acts of acceptance and transfer of property, if charitable assistance was provided in non-monetary form, as well as other settlement documents.
Regardless of the type of document, it must contain information about the benefactor and the recipient of assistance, the date of payment or transfer of property, as well as the amount of funds or the value of the transferred property.
How to apply for a tax discount
To exercise the right to a tax discount, the taxpayer must submit a declaration of property status and income to the supervisory authority at the place of his/her tax address.
You can submit a declaration in person or through an authorized representative, send it by mail with acknowledgment of receipt or use the electronic services of the State Tax Service. In particular, the declaration can be submitted through the Electronic Cabinet of the taxpayer or the mobile application "My Tax Office". Electronic services allow you to generate a declaration with partially filled in data and immediately attach copies of documents confirming the right to a tax discount.
Don't lose your right to a refund
It is necessary to submit a declaration to receive a tax discount based on the results of the reporting year by Dec 31 of the year following the reporting year.
If the taxpayer does not exercise his right within the established period, the opportunity to receive a tax discount for the relevant year will be lost. The legislation does not provide for the transfer of such a right to subsequent tax periods.
Therefore, citizens who made charitable contributions during the year can not only support socially important initiatives, but also return part of the paid personal income tax. To do this, you should take care of the proper execution of supporting documents in advance, check the non-profit status of the recipient of assistance and not miss the deadline for submitting the declaration.
