Can a non-profit organization have a commercial activity?

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

Yes, a non-profit association, that is to say one whose purpose is not to generate profit, can carry on a commercial activity, on a regular or occasional basis. But this can have fiscal consequences.

In principle, a association law 1901 (non-profit) is not engaged in creating and sharing profits, or seeking profit.

Consequently, an association under Law 1901 is, in principle, not subject to the taxes due by persons carrying on a commercial activity (in particular the VAT: titleContent, business tax and territorial economic contribution).

The same is true of all non-profit organizations (NPOs).

If an association decides to carry out a commercial activity, it may continue to be exempt from so-called taxes commercial, if it fulfills all of the following conditions:

Some non-profit organizations can organize 6 charitable or support events per year for their own benefit.

Revenue from such events shall be exempt from commercial taxes, irrespective of the amount involved. The organizations concerned are those of a social, educational, cultural, sporting, social or philanthropic nature.

The exemption relates to events which, appealing to the generosity of the public, provide the organizer with exceptional financial resources. The manifestations targeted may be diverse.

Example :

  • Balls, concerts, folk or variety shows
  • Cinema or theater sessions
  • Charitable or solidarity sales,
  • Exhibitions
  • Kermesses, tombolas, lotteries
  • Sports entertainment

If the lucrative revenue (except that obtained during charitable events) represents a main part of the resources of the association, it is subject to statement and to be taxed from 1er Euro.

If the lucrative revenues are marginal (small) in the budget of the association, they are subject to statement and taxation beyond €73,518.

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