Ukraine Cash Working Group: Advocacy note on the Taxation of Humanitarian Aid

Several humanitarian actors raised high concerns resulting from taxation mechanisms which are not fully adapted to the nature of short-term humanitarian work, concerning both the Value-Added Tax (VAT) exemption for purchases by international organizations, and the Personal Income Tax (PIT) for beneficiaries receiving non-targeted assistance by local organizations.

This is an outline of the current situation, related issues, and specific recommendations. Dispositions of the draft Law on Humanitarian assistance in crisis situation, meant to establish a rapid response mechanisms to humanitarian emergencies, does address most of the issues outlined below. However, since deliberation of the abovementioned Law has been ongoing since 2015, and it is now blocked at Parliamentary Committee level, humanitarian actors are considering other interim options to facilitate the timely and principled delivery of humanitarian aid using other mechanisms since cooperation with Parliament has not been effective, and amend by-laws as suggested below.

UN Office for the Coordination of Humanitarian Affairs:

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