Can a non-profit organization have a commercial activity?

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).

However, the association Law 1901 may carry on a commercial activity, on a regular or occasional basis.

If an association decides to carry out a commercial activity, it may continue to be exempt from so-called taxes commercial if it fulfills the following 3 conditions:

• Its management is selfless
• Its business activities do not compete with the private sector
• The gainful activity represents a marginal (small) part of the association's budget and its non-gainful activities remain the main ones.

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.

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 1^er Euro.

If the lucrative revenues are small in the budget of the association, they are subject to statement and taxation beyond €76,679.