Sub area 2.1 – Tax/fiscal treatment for CSOs and their donors | Standards

Sub-area 2.1: Tax/fiscal treatment for CSOs and
their donors

Principle: CSOs and donors enjoy favourable tax treatment

STANDARD 1

Tax benefits are available
on various income sources
of CSOs

INDICATORS

Legislation:
1. The law provides tax free treatment for all grants and donations supporting
non-for-profit activity of CSOs.
2. The law provides tax benefits for economic activities of CSOs.
3. The law provides tax benefits for passive investments of CSOs.
4. The law allows the establishment of and provides tax benefits for
endowments.
Practice:
1. There is no direct or indirect (hidden) tax on grants reported.
2. Tax benefits for economic activities of CSOs are effective and support the
operation of CSOs.
3. Passive investments are utilized by CSOs and no sanctions are applied in
doing so.
4. Endowments are established without major procedural difficulties and
operated freely, without administrative burden or high financial cost.

STANDARD 2

Incentives are provided
for individual and
corporate giving

INDICATORS

Legislation:
1. The law provides tax deductions for individual and corporate donations to
CSOs.
2. There are clear requirements/conditions for receiving deductible donations
and these include a wide range of publicly beneficial activities.
3.State policies regarding corporate social responsibility consider the needs of
CSOs and include them in their programs.
Practice:
1. There is a functional procedure in place to claim tax deductions for individual
and corporate donations.
2. CSOs are partners to the state in promoting CSR.
3. CSOs working in the main areas of public interest, including human rights
and watchdog organizations, effectively enjoy tax deductible donations.
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