A volunteer is a natural person engaged in charity and is responsible for providing reports to all interested parties, as well as to regulatory bodies. What should the tax reporting of such a benefactor look like and what are the features of its submission, read below.
Features of charity taxation
According to paragraph "b" of item165.1.54 of the Tax Code of Ukraine ( hereinafter – the Tax Code) the total monthly (annual) taxable income of the taxpayer does not include the amount (value) of charity, in particular, received by benefactors - natural persons who are entered in the Register of volunteers of anti-terrorist operations and/or implementation of measures for ensuring national security and defense, repelling and deterring armed aggression of the Russian Federation (hereinafter – the Register of Volunteers) in accordance with the procedure established by Law of Ukraine No. 5073-VI of July 5, 2012 "On Charity and Charitable Organizations" (hereinafter – Law No. 5073 ), for the provision of charity for the benefit of persons specified in paragraphs "a" and "c" of item 165.1.54 of the Tax Code (directly to such persons or through the Ministry of Defense of Ukraine, the Main Directorate of the National Guard of Ukraine, the Security Service of Ukraine, the Foreign Intelligence Service of Ukraine, the Administration of the State Border Service of Ukraine, the Ministry of Internal Affairs of Ukraine, the National Police of Ukraine, the State Security Administration of Ukraine, the Administration of the State Service for Special Communications and Information Protection of Ukraine, through the management bodies of other military formations formed in accordance with the laws of Ukraine, their bodies, military units, elements, institutions or organizations maintained at the expense of the state budget), in the amount, in fact used for such purposes, and for the reimbursement of documented expenses of such benefactors related to the provision of said charity.
The provisions of paragraph "b" of item 165.1.54 of the Tax Code apply to charity received by the specified benefactors - natural persons in the following reporting tax years:
- in the reporting tax year preceding the year of entry of the individual into the Register of Volunteers;
- in the reporting tax year in which the individual was entered in the Register of Volunteers;
- in the reporting tax years following the year of entry of the individual into the Register of Volunteers, but no later than December 31 of the year following the year in which the anti-terrorist operation was completed and/or the state of war, state of emergency in Ukraine was terminated or canceled, and/or measures were completed implementation to ensure national security and defense, repel and deter armed aggression of the Russian Federation.
Specified in paragraph "b" of item 165.1.54 of the Tax Code incomes are not included in the total monthly (annual) taxable income of taxpayers up to and including December 31 of the year following the year in which the anti-terrorist operation was completed and/or the state of war, state of emergency in Ukraine was terminated or canceled, and/or implementation of measures to ensure national security and defense, repel and deter armed aggression of the Russian Federation completed.
The peculiarities of taxation of charity are defined in item 170.7 of the Tax Code.
Procedure for reporting
The procedure for submitting a tax declaration on property and income (hereinafter – the Declaration) by individuals - payers of the personal income tax is established by Art. 179 of the tax Code, according to item 179.1 of which the taxpayer is obliged to submit a Declaration in accordance with the Tax Code.
At the same time, item 179.2 of the Tax Code defines cases in which the tax payer's obligation to submit the Declaration is considered fulfilled and the Declaration is not submitted, except for cases where the submission of the Declaration is expressly provided for by the Tax Code, if, in particular, such a taxpayer received: income, including foreign income, which according to Section IV the Tax Code are not included in the total monthly (annual) taxable income; income exclusively from tax agents, regardless of the type and amount of accrued (paid, provided) income.
If the taxpayer is required to submit the Declaration in accordance with other provisions of the Tax Code, then along with other incomes, the income provided for in item 179.2 of the Tax Code must be indicated in it.
Therefore, a benefactor - natural person who is entered in the Register of Volunteers in accordance with the procedure established by Law No. 5073, must submit the Declaration to the regulatory body in the event that funds other than tax agents are received in the bank account designated for charity.
