Corporate income tax for cultural organisations

In the cultural sector, you cannot escape the question of whether a corporate income tax liability exists. After all, most cultural organisations have been set up as a foundation and a foundation is liable to corporate income tax if and insofar as a business is run.

When is a cultural organisation liable to corporate income tax?

A business may exist if a cultural organisation with one or more activities in a sustainably organised context of labour and capital participates in economic transactions and thereby makes or seeks to make a profit and/or enters into competition with other companies. At the moment that a structural surplus is achieved, this may already be considered a profit motive. In order to determine whether there is a structural surplus, it is important to allocate costs and revenues to the various activities.

Cultural organisations do more

Experience shows that cultural organisations often do more than just offering (access to) visual arts, architecture, a museum, dance, film, the lending of books, (pop) music and (musical) theatre. Often there is a food and beverage service facility, a (museum) shop and / or the possibility of renting a space. In the case of cultural organisations, corporate income tax may be prevented or limited by various specific measures included in the Corporate Income Tax Act 1969. Consider for instance the choice for full tax liability, the possibility to deduct fictitious wage costs from the taxable profit if volunteers are used and the creation of a so-called fiscal expenditure reserve.

It is crucial to qualify the cash flow properly. Thus, under certain conditions, a donation may be excluded from the taxable profit. It is important to make some choices in good time (in advance). We are happy to help you with this analysis.

Want to know more?

Would you like to know more about corporate income tax for your cultural organisation? Please contact Marieke van Kooten by e-mail or by telephone: +31 (0)88 277 22 64 or Netty van Kreveld by e-mail or by telephone: +31 (0)88 277 10 22. They will be happy to help you.