Taxation of citizens' associations

A membership fee is not always a membership fee

Non-profit status does not mean tax obligations do not exist.

We help citizens' associations properly organise their operations, assess tax risks, and align their work with current regulations.

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Membership fees
Donations
Grants
Project funds
Sponsorships
Tax treatment
PDV
Corporate income tax
Recommendations
Who is this service for?
Citizens' associations
Sports associations
Professional associations
Cultural and humanitarian organisations
Foundations and endowments
Organisations implementing projects with domestic and international donations
How are citizens' associations taxed?

Citizens' associations are established to pursue goals of general interest and, as a rule, do not aim to generate profit for their members.

However, non-profit status does not automatically mean the absence of tax obligations.

Tax treatment depends on the source of income, the type of activities the organisation carries out, and how funds are used.

That is why it is important to consider tax implications before organising activities, not only after they are carried out.

KCM recommendation
A membership fee is not always a membership fee

An association's income may come from various sources:

membership fee
donation
grants
project funds
sponsorships
income from activity

Our team provides security, reduces tax risks, and enables you to focus on your mission.

Areas we analyse

Commercial activity

We assess whether the activities carried out constitute commercial activity and what the tax consequences are.

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Corporate income tax for citizens' associations

We analyse exemptions, taxable income, and the structure of expenses.

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VAT and citizens' associations

We determine whether you are in the VAT system and which activities are subject to taxation.

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Profit distributions and dividends

We help you understand the tax treatment of payments and potential obligations.

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Related parties and transfer pricing

We review related-party transactions and transfer pricing risks.

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Why is taxation linked to accounting?

Tax treatment depends on accounting records and proper bookkeeping entries.

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What do you get from KCM?

Analysis of the organisation's tax position

A detailed assessment of your current position.

Tax risk assessment

We identify potential risks and propose measures.

Support during tax proceedings

We represent you and protect your rights.

Support during project and donation implementation

We follow the process from idea to final report.

Support from accountants, advisors, and lawyers

Comprehensive support in one place.

Support in communication with institutions

Precise communication and timely information.

Frequently Asked Questions

Frequently Asked Questions

Can a citizens' association generate profit?
An association may achieve a surplus of income over expenses, but earned profit cannot be distributed to members, founders, or representatives, but is used solely to pursue the association's objectives.
Can an association carry out business activities?
Yes. A citizens' association can register and carry out business activities if the conditions prescribed by law are met, provided the activity is in line with statutory objectives and of limited scope.
Can an association be in the VAT system?
Yes, an association can be in the VAT system if its turnover exceeds the prescribed threshold or if it voluntarily joins the VAT system. This depends on the nature and scope of the association's activities.
Does an association pay corporate income tax?
Associations may have certain tax obligations depending on the types of income they generate. Membership fees and donations are treated differently from income from commercial activity. For precise information, we recommend consulting our team.
Do you also provide support during tax audits?
Yes. We provide support in preparing documentation, communicating with the Tax Administration, and representation during tax proceedings and audits.
When should you consider switching to another model?
When business volume grows, when the scope of commercial activity increases, or when an organisation plans to expand its activities. Before making changes, we recommend analysing legal and tax consequences.

Before launching a project or activity, check the tax implications.

Schedule an assessment and find out how your organisation can be secure, compliant, and focused on its mission.

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