NEW PUBLICATIONS IN BCNL.ORG
The second edition of the survey of tax laws affecting non-government organizations in Central and Eastern Europe, done by ICNL, is published on the BCNL web page in the ANALYSES AND PUBLICATIONS/ ANALYSES section.
The survey reviews the tax legislation of NGOs in 16 countries throughout Central and Eastern Europe – Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Chez Republic, Serbia and Monte Negro, Slovakia and Slovenia.
The analysis is done on the basis of answers to a questionnaire concerning the tax laws and legal regulations for NGOs, provided by experienced legal practitioners in each of the countries mentioned above. The edition includes the basic issues related to the legal framework of income tax or profit tax for NGOs; exemption from such taxes for NGOs, taxation of income from economic activities and investments, taxation and exemption from other taxes, such as real estate property tax, donations, heritage, and value added tax, as well as the opportunities for tax credits and reduced tax rates for physical and legal persons which give donations to NGOs or pursue charitable activity.
The analysis achieves two main goals. The first one is informative – it summarizes the information about the tax legal framework applicable to NGOs, effective at the time of its preparation. The second one is analytical – the survey aims to identify the areas in which the revisions of tax legislation in the region will help harmonize the laws with the good international practice, and thus, create a favourable environment for developing NGOs and improving their financial sustainability.
In the same section of the BCNL web page in Bulgarian, two parts of the national representative survey “Introduction to the tax benefits”, done by Alfa Research among citizens and companies, is published.
The main conclusions from this survey are as follows:
1. More than ½ of the Bulgarians have made a donation in the last year. More often, it has been under the form of help for a concrete person in need, and more rarely it has been in favor of an institution or an organization;
2. The main factors which influence the process of making a decision for granting are both the financial status and the identified designation of the donated funds;
3. The tax benefits are an important factor for two basic social groups that show greatest activity and follow certain economic purposes while making a donation. These groups are the private proprietors and the self-employed persons;
The overcoming of the lack of information among the basic groups willing to donate could lead to stimulating their behavior towards granting funds as well as towards using the mechanisms of tax benefits.
The primary conclusions from the survey about the awareness of the firms of the tax benefits for donations are the following:
1. Philanthropy is a wide-spread activity among companies in Bulgaria;
2. Towards the end of the last year charity in Bulgaria was motivated entirely by high moral values and compassion to those in need;
3. Generally, the companies do not plan donations in their budgets and their whole business structuring;
4. There are few companies that are deeply interested in tax benefits on donations and they seldom seek information about the issue;
5. The reasons for insufficient information and not enough interest in the administrative side of donating are caused mainly by unattractive tax check-offs, which, according to most of the people inquired, cannot be stimulation to granting.
The general conclusion from the survey is that the Bulgarian philanthropy has a long way to pass before it reaches its mature form, because firstly, the government does not have the possibility to offer enough attractive conditions for donating, and secondly, the moral perceptions of charity in society do not allow the Bulgarian proprietors to seriously demand changes in the legislation.