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How to Help Volunteers and not to Fall Victim to Swindlers


 Andriy Sydorenko, Lawyer at Ilyashev & Partners Law Firm
Source: The RBC Ukraine 

581To find out how to collect money for the needs of ATO, it should be understood that, in accordance with the Law “On volunteer activities”, volunteering is a charity activity comprising unpaid works and services provided by volunteers and volunteer organizations.

Pursuant to law, volunteers can receive funds (money) and other property to carry out volunteer activities. To get the collected funds tax exempt, a volunteer organization must be entered into the tax register of non-profit organizations.

It is just the beginning of a challenging volunteer work. For a volunteer to be able to work properly, it is necessary to create an organization and put it on the tax register of non-profit organizations. Thereafter, a non-profit organization will receive donations legally, exempt them from taxes and provide aid through donations received.

Obviously, this is the root of all legal problems of volunteers: they have to waste time and effort for bureaucratic formalities instead of using them for a good purpose. Perhaps, for this reason many volunteers do not bother to formalize their activities, and just collect money and help the indigent.

Recording of the organization in the register of non-profit organizations can help a volunteer to get help from legal entities – income tax payers. The Tax Code allows income tax taxpayers to allocate to expenses charitable funds paid to non-profit organizations listed in the tax register. Income tax payers can allocate to expenses up to 4% of income for the previous year.

The problem of combating fraud during collection of funds for charitable purposes – not only for the purposes of ATO – is raising funds in cash in the so-called “charity boxes” used by volunteers of charitable organizations. There are fraudsters who hide behind the names of well-known charitable organizations and collect money for themselves under the guise of volunteers. Usually such pseudo volunteers have no sealed (stamped) charity boxes to raise funds, have neither documents (power of attorney) to act on behalf of a charitable organization nor documents, which confirm the purpose of collecting money.

In addition to such fraudsters there may be pseudo charitable organizations. According to the documents, they are engaged in charitable activities, but in fact do business in the form of organized begging. Such organizations may collect tens of thousands of hryvnia donations in cash per day, but the money is spent on maintaining the organization’s activities: from compensatory and incentive payments to volunteers to kickbacks to regulatory authorities. As a result, the accounts of these charitable organizations get crumbs from the funds collected.

It may explain why many our fellow citizens decide to collect money to help the ATO participants themselves. As most volunteers do not bother to document their activities and work through Facebook, friends and acquaintances, it is very difficult to distinguish with whom you are dealing – with a fraudster or a law-abiding citizen who does not want to get involved in bureaucratic formalities.

Therefore, the only effective advice for all citizens who want to help the volunteers rather than the fraudsters is to check reliability of volunteers through the feedback of their friends and acquaintances. After all, lack of documents with a beginning volunteer does not mean that he is a fraudster, and volunteer registrations and documents will not turn a fraudster into a respectable man.

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