Are associations and foundations required to submit an annual corporate tax declaration?

associations foundations tax return

Associations and foundations as non-profit legal entities freely determine the means to achieve their goals. These legal entities are established to carry out non-profit activities, but they may carry out additional economic activity related to the subject of their main activity, using the income to achieve the goals specified in their statute or constitutive act.

In view of the above, although they are not traders within the meaning of their status, such as the commercial companies, non-profit legal entities are taxable in their capacity as local legal entities when carrying out commercial transactions, as well as when renting movable and immovable property.

In order to define an activity carried out by a non-profit legal entity as commercial / economic, it should meet the following criteria:
– the activity must be carried out by occupation, to be a source of constant, regular income and the activity must be carried out for profit (the profit does not have to be actually realized) or the activity must be carried out in the private interest of the legal person;
– the prices of the provided services or goods to be formed on a market principle.

An exemption from taxation is provided when the following conditions are simultaneously met upon receipt of the income:
– the revenues are realized as a result of actions performed by the non-profit legal entity, which it is obliged to perform by virtue of a normative act, and
– the price is determined in a normative act or in a normative act a price restriction is set to the amount of the incurred expenses.

Provided that the non-profit legal entity carries out a certain type of commercial activity or rents out movable and immovable property, it must file an annual tax return for the tax financial result and for the due annual corporate tax. The deadline for submitting the declaration is from March 1 to June 30 of the year following the year to which the respective declared revenues refer.

If necessary, the GCE team can provide you with timely and competent assistance in preparing and filing an annual tax return.

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