13. Direct tax - general position

14. Recognition of associations/foundations for tax purposes

15. Criteria for recognition

16. Criteria for obtaining tax concessions

17. Gifts to associations/foundations

12. Indirect tax - Specific exemptions or privileged rates

Neither public associations nor foundations are entitled to VAT privileges. Exceptions are cases subject to intergovernmental agreements on technical assistance, in which case the decision to levy VAT is made by the Ministry of Finance. Other possibilities are ruled out.

As for customs duties, public associations are exempted from custom duties and other taxes while carrying out export-import operations provided the shipped goods come through intergovernmental agreements of technical assistance (this specifically refers to World Bank, TACIS, USAID).

Local public administration bodies decide on local taxes (e.g. rent fees for premises in municipal property), however, individual privileges are not allowed.

Tax for the territory arrangement is binding for non-commercial organizations and is equal 10% of the minimal salary for each employee.

13. Direct tax - general position

Only public benefit associations and foundations are entitled to exemptions from the income tax. The decision is taken by the Ministry of Finance based on the list of public benefit organisations issued by the Certification Commission under the Ministry of Justice.

Real estate tax is regulated in Title VI of the Fiscal Code and stipulate exemptions from the Real Estate Tax for some non-commercial organizations, such as societies of the blind, deaf and handicapped persons, as well as institutions founded by them to pursue bylaws goals of these societies.

There are no exemptions from other taxes for public associations.

14. Recognition of associations/foundations for tax purposes

Ministry of Finance recognise as being eligible for income tax exemptions only public benefit associations and foundations. Certification Commission of the Ministry of Justice is the body issuing State Certificates.

15. Criteria for recognition

Public benefit organisations which meet the following requirements:

1. are registered or founded in compliance with the law, and specify in their bylaws, regulation, or another document the scope of work of the non-commercial organizations and its status as a noncommercial organization, as well as interdiction to distribute the income or property among organization members, founders or private persons, including during reorganization and liquidation process of the non-commercial organization;
2. the entire income from the bylaws activity is spend to pursue bylaw goals;
3. use no part of their property or income in the interest of an organization member, founder, or private person;
4. support no political party, electoral bloc or candidate running for public office and spend no part of the income or property to finance them;

16. Criteria for obtaining tax concessions

The only criteria for obtaining public benefit status (and consequently getting tax concessions) is for an organisation to function for at least six months and to have no arrears to the state budget, proved by a letter from the State Fiscal Inspectorate.

17. Gifts to associations/foundations

Article 36 of the Tax Code defines donations for charitable purposes as gifts and donations in favour of organisations issued public benefit certificate. Under the same article, resident donors are entitled to deduction of any donations made for charitable purposes during the current fiscal year, provided these do not exceed 7% of the taxable income. Donations for charitable purposes shall be deducted provided proper evidence is presented. A donor declares donations to the Ministry of Finance, that fixes the fact in order to decrease taxation of the donor for an appropriate amount.

There are no clear provisions regarding donations to non-resident associations or foundations.

Legal framework / Taxation