As
a general rule
associations
are groups
of individuals (a minimum of 3 people)
that are
created
for social
purposes.
Promoters
and
members
share a
certain goal
(civic,
cultural,
sports,
etc.) and
are feed
economically
by fees
paid by
members
and also
they can
get grants
for
promoting
their purposes.
Under
these premises
can the
associations
run
economic
activities?
We must clarify that associations generally reach the consideration of non-profit entities and that forces them to allocate all resources obtained in the purposes for which they were created. The are unable to deliver economic benefits among partners, as do corporations, but that does not stop them carrying out economic activities.
Activities to generate funds for the association Imagine a cultural association that has a space in the association premieses that is intended to provide coffee-bar services to its partners or to third parties , it would be a way to earn income through profits made by those services. That's perfectly legal, but always bearing in mind that these benefits are allocated to the activities of the association and the money cannot be shared among the partners,
As this example there are many but as this is an economic activity like any other requires its registration with the tax authorities and the obligation of filling up periodic tax forms.
We must clarify that associations generally reach the consideration of non-profit entities and that forces them to allocate all resources obtained in the purposes for which they were created. The are unable to deliver economic benefits among partners, as do corporations, but that does not stop them carrying out economic activities.
Activities to generate funds for the association Imagine a cultural association that has a space in the association premieses that is intended to provide coffee-bar services to its partners or to third parties , it would be a way to earn income through profits made by those services. That's perfectly legal, but always bearing in mind that these benefits are allocated to the activities of the association and the money cannot be shared among the partners,
As this example there are many but as this is an economic activity like any other requires its registration with the tax authorities and the obligation of filling up periodic tax forms.
Partnerships
are
required
to file
the
corporation tax during the
month of
July the
corresponding declaration
to the
previous year.
However,
the
associations will not be required to
file
the corporation tax if
they
meet the following
requirements:
-The
total
income
does not exceed
€
100,000 per annum.
-The
not
exempt
income
subject
to
withholding
do not exceeds
2,000
Euros
per
year.
-That
all non-exempt
income
earned
are
subject
to
withholding.
Generally associations can apply to the Tax Office the VAT exemption, based on the social characteristics of its operation. But it is noteworthy that this exemption is referring only to membership fees, so if they perform ancillary economic activities and these activities are subject to VAT the associations shall submit the corresponding tax statement, the exemption does not apply in these cases.
Generally associations can apply to the Tax Office the VAT exemption, based on the social characteristics of its operation. But it is noteworthy that this exemption is referring only to membership fees, so if they perform ancillary economic activities and these activities are subject to VAT the associations shall submit the corresponding tax statement, the exemption does not apply in these cases.
Because
of the greater
ease of
obtaining
grants
there are
companies that
abuse the
legal
form of
partnerships-associations
but at the
end of the day they have
to pay the
same taxes
by the
economic
activities
they perform having
the disadvantage that they cannot distribute the profit among the
partners.
For
further detail do not hesitate in contact VP Advisers
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