Do clubs also have to pay value-added tax?
February 26, 2022 | 40,00 EUR | answered by Emma Wagner
Dear tax advisor,
I am Alwin Krause, the chairman of a non-profit organization in my region. In recent years, we have generated increased income through membership fees, donations, and events. Now, the question arises whether organizations like ours are required to pay value added tax.
So far, we have mainly focused on fulfilling our statutory purposes and have not dealt with tax questions as much. However, I am concerned that we may not be correctly adhering to tax regulations and could potentially conflict with the tax office.
Therefore, I would like to know from you whether and under what circumstances non-profit organizations must pay value added tax. Are there any exceptions or special regulations that apply to organizations? What specific steps should we take as an organization to ensure that we are acting in compliance with tax laws?
I look forward to your professional assessment and thank you in advance for your assistance.
Sincerely,
Alwin Krause
Dear Mr. Krause,
Thank you for your inquiry regarding the value-added tax liability for non-profit organizations. As a tax consultant with extensive experience in the field of value-added tax, I am pleased to be able to help you.
In principle, non-profit organizations are also subject to tax regulations and may be required to pay value-added tax under certain circumstances. The obligation to pay value-added tax depends on the income and activities of the organization.
However, there are exceptions and special regulations that apply to non-profit organizations. For example, income that directly serves the tax-privileged purpose is generally exempt from value-added tax. This includes membership fees, donations, or grants for non-profit projects.
It is different, however, with economic activities that the organization carries out to generate additional income. In this case, it may be necessary to pay value-added tax if certain revenue thresholds are exceeded. These thresholds are usually higher for non-profit organizations than for commercial companies.
To ensure that your organization is acting in compliance with tax regulations, I recommend creating a detailed list of all income and expenses and checking them for possible value-added tax liabilities. Additionally, you should familiarize yourself with the tax regulations for non-profit organizations and, if necessary, seek professional assistance to ensure that all regulations are correctly followed.
If you have any further questions or need assistance, I am at your disposal. I hope that this information has been helpful to you and wish you success in the tax handling of your organization.
Best regards,
Emma Wagner
