Area 2 – Sub Areas

Box 3: EU Guidelines assessment Sub-area 2.1. Tax/fiscal treatment for CSOs and their donors

Result 2.2. & 2.3. CSOs are not subjects to the Law on Profit Tax, and the income from CSOs mission-related economic activity, is tax free up to the amount of annual income of 16,000 EUR per year from economic activity, then 1% tax is calculated on the amount exceeding the threshold. The Law on Personal Income Tax also provides certain exemptions. Finally, the LSDPA provides tax incentives for individual (20% with limitation) and corporate (3-5%) giving. However, the LSDPA should be amended particularly the procedure in order for donations to be stimulated. CSOs mostly use the possibility for VAT exemptions on the activities that they implement within the foreign funded projects, even though the procedure for registering the projects within SEA was assessed as particularly long and burdensome. 

Box 4: EU Guidelines assessment Sub-area 2.2. State support

Result 2.4. The comprehensive reform of the system for state funding for CSOs has progressed slowly. During the year, certain state institutions that allocate funding have undertaken steps to improve different aspects of the procedure and increase their transparency and accountability (increased number of open calls, availability of information concerning awarded projects to CSOs). In addition, the state funding for CSOs on central level increased. Government support to CSOs was available, yet insufficient. The data on the distributed amount of public funding for CSOs has become available in details via the Open Finance portal. The Ministry of Labor and Social Policy and the Agency for Youth and Sport have the largest budgets for distribution to CSOs concerning social protection, sports and youth. The legal framework for public funding for CSOs does not provide:  institutional support; prepayments; multi-annual contracts; and financing EU and other projects.

Box 5: EU Guidelines assessment Sub-area 2.3. Human resources

Result 1.2. Certain provisions in the policies and the  legal environment facilitate and, to a certain extent stimulate volunteering and employment in CSOs . Employment data for the civil society sector is collected and published by the CRNM. The data is extracted from the financial reports of the CSOs submitted on annual level (number of full-time employees, expenditures for salaries, etc.). There is no data available yet on part-time employees, people with short-term contracts and volunteers. The total number of employees in associations and foundations according to the CRNM is 1,645 (0.21% of all employed is the country in 2018). Even though the number of volunteers is not available, certain reports point out a very low engagement in volunteerism.

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