Chart nr 6: ISTAT-Census 2001 of the Non profit Institutions – Working Classes, Institutions

II. SPECIAL LEGAL/TAX SOLUTIONS FOR SOCIAL ECONOMY

1- Institutional infrastructure for social economy(for example: which ministry is responsible for co-operation with social economy entities)

To be completed

2- Tax incentives for social economy entities

Fiscally the No profit entities can be no commercial entities or unprofitable Organizations of Social Utility.

Next pages will try to detail this difference.
I. TAX CONCESSION FOR NO COMMERCIAL INSTITUTIONS

The tax treatment for this type of institution can be compared to the one that applies to single taxpayer. This treatment has two profiles, the first regime has an entrepreneurial imprint ( applicable for the commercial activities) the second one has a personal imprint (applicable to extra activities to the eventual business activity).

The commercial entities, instead, undergo to the first regime for the totality of their own activities.

The main taxes are:

income tax, V.A.T. (Value-added-tax),

And L.H.R local housing rates

Inheritance tax
1 -Direct taxes

The extra economic component of the non commercial institution has driven the legislator to make a differentiation based on the fact that theirs structure do not operate in an economic context.

Therefore this institution’s income taxation follow hybrid rules, first one it’s called principle of “ limited taxability” for which only particular typology of income are subjected to taxation. Precisely, the total taxable income is not given by the earnings that converge in one only income category, but from the sum of the earnings that belong to the following categories:

• 
  land income ( buildings; lands),
  
• 
  capital gain ( financial annuity, share stock etc.),
  
• 
  commercial income (goods and services production, trade, brokerage),
  
• 
  various income (residual category that include for ex. wins, to do obligations; not to do obligations etc.),
  

Are excluded from the taxable income

1. 
   funds came from public collections. This funds are not subjected to direct taxation, are free of V.A.T. and in general free of any tax as long as the public collection:
   
   • 
     is directed to an indistinct mass of people,
     
   • 
     occasional,
     
   • 
     it has to take place along with celebrations, recurrences or sensitization campaign,
     
   • 
     given services or transferred goods need to have moderate value.
     
   • 
     a separate and apposite financial statement must be written within four month by the financial annual closure.
     

2. 
   Contributes given to no commercial institution from public administrations to perform health and charity work activities with social finality according with the law that set in order the public health-care service .
   

From the global income some determined burdens are deductible such as fees, emphyteusis , census and some other burdens on the estate income that contribute to form the global income, money given to their employees in occasion of polling stations, contributes, donation and oblation granted to no government organization or not-for-profit organizations. The Corporate Income Tax must be calculated then on the total income curtailed of the net expenses up listed (if present); from the gross taxes, then, might be cut some other specific burdens in the measure of 19% of their amount.

The principle of limited taxability take place also when it comes about fiscal accounting and needs the fully separation between commercial and non commercial environment of the institution. It’s like if the tax law wouldn’t consider the extra commercial management: therefore tax obligations come to life whenever a business (habitual) management would be present next to the ordinary institution’s activity.

2 -.V.A.T.

It stands for Value - Added Tax, which consist of the increasing value of the transferred goods and of the performed services in the whole process that bring the goods or services from the producers to the consumers. It’s the consumers that has to support the entire weight of this tax since it’s not available for him any deductible mechanism, available instead for the others parts of this cycle.

This tax is applicable only for the operations made on the national soil in the execution of a business or an art or profession ( this last almost worthless for no commercial institution) and also for importations.

All the activities carried out from commercial institution are presumptively considered taxable, instead for the no commercial institution taxable it’s only the continuative transfer of goods and the services performances, while the institutional activities are exempt.

3 -Inheritance and donation

In these two areas the no commercial institution benefit of some exemptions. Are exempt the money transfer with recipient foundation legally recognized that pursuit purposes such as assistance, study, scientific research, education or other purposes of public utility. The non taxability is extended also to transfers of other associations or foundation legally recognized different from the one up listed, but they have to pursuit the same purposes.

4 -Local Housing Rates

The no commercial institutions with ownership rights, usufruct, usage and tenancy right on real estates are the passive recipients of this local housing rate. Building with cultural destination or place of worship, building owned by the Vatican, building declared unfit for use restored and destined to activities of assistance, agricultural lands located in mountains or hills areas specifically listed are not subjected to this rates. The L.H.R. discipline states a exemption for commercial institutions about real estates properties owned by them and with finality of assistance, welfare, health-care, educational, cultural, recreational and sportive and creed.

II.NOT-FOR-PROFIT ORGANIZATION’S TAX CONCESSIONS
(from the web site of the Ministry of Economy and Finance) www.finanze.it/export/sites/default/finanze/dossier_tematici/onlus/altre.htm)

1. 
   Direct Taxes
   

Are concessionary all the earnings coming from institutional activities, which means all those performed in pursuit of exclusive social aid finalities, because the performances of these type can not be compared to a commercial one (except the case of not for profit associations that has the cooperative juridical form).Furthermore, all the earnings that come straight from all the institutional activities don’t form the taxable income.

This kind of activities refer to two different typology:

• 
  Activities comparable to the institutional one, only for areas referring to health-care, education, training, no professional sport, art and culture promotion, civil right tutelage.
  
• 
  Supplementary activities of the institutional one ‘cause they integrate them (for ex. selling of informative material in museum, selling of t-shirt or gadget during a sensitization campaign)
  
• 
  Moreover, are excluded from the income formation
  
• 
  Fund coming from not continuative public collection, also trough modest value goods donation or services given during celebration, festivity and sensitization campaign
  
• 
  Contributes given to this organizations by public administrations for the execution of activities with social finalities performed in conformity of the institutional purposes.
  

2. 
   Free Allocations
   

To the sponsors that make free allocation ( ex. donation) toward this organizations for an amount inferior to 2.065,83 Euro or 2% of the declared enterprise income a tax concession is provided.

Particularly advantaged also are the “paid in nature” allocations made by enterprises, they can consist of goods transfer or in the employment of their own employees , hired at indeterminate time, to perform services toward the not-for profit organizations. In this case a further deductibility, as social utility burdens, on the enterprise income is provided. The amount of this deductibility consist of 5 per thousand of the supported expenses by the enterprise for performances of dependent labour, as it is declared in the income tax return. Starting from 2005, as an alternative to the other form of deductibility, became possible to deduct liberal allocation up to 10% of the total declared income (with a maximal of 70.000 Euro).

Sanctions are provided for illicit deductions. If the illegality come from the absence of the beneficiary institution of the requested conditions in order to be able to benefit this concessions, the beneficiary institution it’s jointly liable with the enterprise that performed the service and that illegally deducted for the major due taxes and related sanctions.

3. 
   Value – Added Tax (VAT)
   

The not for profit organizations, limited to the institutional activities, don’t have any obligation to certify their purchases trough receipt or payment slip. Advertisement activity is excluded from V.A.T applicability. Are exempt also determined performances like:

• 
  ambulance service,
  
• 
  hospitalization and health care,
  
• 
  childhood and juvenile educational performances and any gender of educational performances,
  
• 
  socio-medical, domiciliary care and outpatient treatment, in favour of indigent people,
  
• 
  Are also provided some V.A.T. exemptions relatively some typology of transfers.
  

4. 
   Concession’s access
   

To benefit this peculiar regime these organizations must have successfully applied to the not-for profit organization unique register. The application take place after a communication of the institution to the regional management of the Tax Agency that has territorial jurisdiction where the organization residence for tax purposes is located. Any subsequent modification that would bring a loss of qualification must be communicated in the same way.

5. 
   Other taxes
   

Stamp duty: all the acts, documents, contracts, etc. made or requested by no profit organisation are tax free. Therefore, this relief involves the no profit organisations both as receivers of the act and as drafters of the acts.

Tax on government licence: acts and provisions concerning no profit organisations are free from taxes on government licence.

Registration fee: it is a fixed amount due for transfers of a valuable consideration of property of real estates and for acts that set up the rights for the use of properties for no profit organisations, at particular conditions.

Local taxes: local authorities (city councils, provinces, regions) can make laws on tax exemption or reduction for no profit organisations.

Tax on showbusiness activities: it is not due for showbusiness activities performed occasionally by no profit organisations, in case of celebrations, anniversaries and campaigns. It is compulsory to communicate the activity to the competent office of the territory before the start of the show.
TAX REDUCTIONS FOR DONATIONS TO NO PROFIT ORGANISATION

The Italian lawmaker has foreseen tax reliefs also for the legal and natural persons that contribute to the support of the no profit activities. The following chart defines the different types of donations, contributions in money or in kind, and it shows for each donor its respective tax relief.

(Chart drawn from: Come entrare nel mondo del non profit - Guida pratica; a cura di: Gruppo di studio costituito tra Agenzia delle Entrate Direzioni Regionali del Veneto e del Friuli Venezia Giulia, Direzioni Provinciali di Trento e Bolzano e Conferenza Permanente tra gli Ordini dei Dottori Commercialisti delle Tre Venezie con la collaborazione operativa dell’Associazione dei Dottori Commercialisti delle Tre Venezie, 2004)

Directory: files
files -> Answer True False 2 points Question 2
files -> Integer programming and game theory
files -> 4 Integer Programming
files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. Objective
files -> Pop Warner History
files -> North Carolina Inclusion Initiative Mapping Where Children with ieps are Being Served Purpose
files -> Fall 2013 Spring 2014 Program Data: Standard 1 Exhibit 4d
files -> Hanban – asia society confucius classrooms network 2010 request for proposal
files -> Northern England’s set-jetting locations