By the end of the year, the parliament is expected to adopt in the first reading draft law No. 10040 “On Amendments to the Tax Code of Ukraine regarding the support of volunteer activities under martial law”. This was stated by Olena Shulyak, head of the Verkhovna Rada’s Committee on the Organization of State Power, Local Self-Government, Regional Development and Urban Planning.
The purpose of the draft law is to exempt from taxation charitable foundations and public organizations engaged in volunteer life and health insurance. Shulyak emphasized that the document was registered back in September 2023, but due to long negotiations, in particular with the Ministry of Finance, it still could not be put to a vote even in the first reading.
According to Shulyak, since 2015, the law “On volunteering” has been in force in Ukraine, but during this time only about 40 volunteers or their families received the prescribed assistance. Public and charitable organizations are willing to independently insure volunteers to ensure payments in the event of their death or injury. However, this is prevented by the current provision of the Tax Code, according to which insurance payments under life and health insurance contracts of volunteers are subject to personal income tax. The draft law provides for the abolition of this tax.
“We registered the draft law No. 10040 itself exactly one year ago – in September 2023, but until now it was not possible to move it from its place. We managed to agree on it with the tax committee, but the Ministry of Finance did not allow us to reach a consensus for a long time. In particular, because that there were fears that it could become a source of tax evasion and withdrawal of funds. This is nonsense from the point of view of the work of charitable foundations. This is an absolutely typical practice for the US, Canada and the EU. Their experience clearly indicates that insurance volunteers are necessary under the condition of easing taxation”, – emphasized Shulyak.
Currently, according to her, the final stage of coordination of changes with the Ministry of Finance is underway, which gives hope for the adoption of the draft law in the first reading by the end of 2024.
