Non-profit status and commercial operations
January 30, 2019 | 40,00 EUR | answered by Steuerberater Bernd Thomas
I have a question regarding our non-profit organization and a future economic business operation.
Background:
Non-profit registered association since 2002. Tax number available.
The association wants to start an economic business operation to finance its ideal tasks. The economic business operation will involve selling commercial goods in an online shop to EU and non-EU countries and cannot be considered as the association's economic purpose operation.
A) Does a non-profit organization need another tax number for an economic business operation, or is the existing tax number of the organization sufficient?
B) Can a non-profit organization obtain a VAT identification number for its economic business operation?
C) Can a non-profit organization establish a commercially active subsidiary (not a tax-privileged purpose operation) and provide this subsidiary with financial means? The subsidiary will then carry out the economic business operation for the non-profit organization. Or could this endanger the non-profit status of the parent organization?
Thank you for your response.
Dear inquirer,
I am happy to answer your inquiry based on the information provided in the context of an initial consultation on frag-einen.com. The response will be based on the factual information you have provided. Missing or incorrect information may affect the legal outcome.
The establishment of an economic entity must be reported to the tax office. Usually, you will then receive a different tax number, as a different tax district within the tax office will be responsible.
You can apply for a VAT identification number online at the Federal Central Tax Office, which is recommended, especially if you generate revenues in other EU countries. There is generally no restriction for associations, but the Federal Central Tax Office will check if you are classified as a VAT case at your tax office.
In principle, an association can consolidate its economic activities in a non-profit subsidiary. However, the impact on tax-exempt status should be examined based on the articles of association, the purpose of the association, and the use of funds. In such cases, I recommend coordinating with the tax office or seeking advice from a local colleague.
Best regards,
Bernd Thomas
Tax Advisor
Dipl.-Kaufmann (FH) Bernd Thomas, Tax Advisor, Neustadtswall 85, 28199 Bremen, bernd.thomas@yahoo.de, VAT ID no. DE316948369, member of the Hanseatic Chamber of Tax Advisors Bremen, registration number 111705, professional liability insurance with R+V Allgemeine Versicherung AG, Mittlerer Pfad 24, 70499 Stuttgart, insurance coverage: 250,000 euros per individual claim; annual maximum benefit: 1,000,000 euros (for all damages in one insurance year), the professional regulations of the StBerG apply, available at www.gesetze-im-internet.de/stberg
