Corporate income tax for interest groups
Interest groups are concentrating more and more on new activities to generate additional income. This is because the money from contributions, grants and donations is not always sufficient any longer to achieve their goals. In that context, it is important to have clarity as to whether or not these activities are performed in an enterprise from a tax point of view. If one or more activities are used to run a business, there may be a (partial) corporate income tax liability.
When is an activity of an interest group subject to corporate income tax?
There may be a full or partial corporate income tax liability if an interest group 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 some cases, there is no corporate income tax liability when an interest group is not participating in economic transactions. This is the case, for example, if an interest group carries out its activities exclusively to a restricted circle. The Dutch Tax Administration therefore applies strict conditions.
Offering a product or service outside one's own community does in principle fall under entrepreneurship from a tax point of view. Examples of income from business activities are: the commission on insurances with membership benefits, a paid app with information for members, exploitation of food and beverage services in the meeting house, rental of rooms and a structurally published magazine with advertisements and promotions. It is pivotal to accurately determine which activities are (or may be) included in the tax liability, so that the scope of the tax liability (and any risk items) is clear.
Want to know more?
Would you like to know more about the corporate income tax for your interest group? If so, please contact Netty van Kreveld by e-mail or by telephone: +31 (0)88 277 10 22 of Marieke van Kooten by e-mail or by telephone: +31 (0)88 277 22 64. They will be happy to help you.
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