PBO: PUBLIC BENEFIT ORGANISATION
Does your institution promote the general interest? If so, your institution may qualify as a PBO (in Dutch: ANBI). This may lead to significant tax advantages. But, of course, the right conditions have to be met: for example, the activities and policy plan of a PBO must be committed to “the public benefit”. In practice, a lot of questions come up regarding to this. We are happy to assist you with all your questions regarding to the PBO status and other tax issues.
What is in it for you
If your organisation qualifies as a PBO, several tax facilities apply. For example, persons who donate to a PBO have the option to deduct their donations (whether or not periodically) from their Dutch personal income tax. The Dutch corporate income tax also offers the possibility to deduct donations. In addition, PBO’s do not pay gift and inheritance tax: without the PBO-status, these proceeds may be taxed against a tax rate of max. 40%. Proceeds “for the general benefit” which are received from a PBO by an entity or individual are also exempt from gift tax.
How HVK Stevens can assist you
PBO’s come in all kinds. We are happy to provide you with tailormade advice. We are also able to perform a PBO scan on your institution to assess whether or not your institution meets the PBO requirements. This is of relevance, especially now the PBO-status of a number of specific institutions performing philosophy of life, culture and welfare is being withdrawn – often unjustly. PBO’s receiving remunerations for their activities are also regularly a trending topic. Moreover, the Dutch Tax Authorities checks PBO’s more often than before.
Commercial and business activities
In practice, discussions regularly arise about the extent to which a PBO may carry out activities against a remuneration. Such activities are often referred to as (semi-)commercial or business activities. The Dutch Tax Authorities maintained a very strict position regarding to this issue: the inspector was of opinion that institutions which charged customary rates for non-fundraising activities had to hand in their PBO-status. This position impeded a lot of PBO’s in their activities. We therefore successfully challenged this opinion and the Supreme Court confirmed that the position of the Dutch Tax Authorities is incorrect. This ruling is still very important for a lot of PBO’s. Of course, carrying out commercial and business activities still requires a fiscal check: do these activities not interfere with the PBO-status or lead to any taxation?
Other tax services for PBO’s
PBO’s may also have to deal with other taxes. These include corporate income tax, wage tax and VAT. We are therefore happy to assist you with:
- Optimizing the VAT position of PBO’s and other foundations and associations;
- Analyzing the risks and opportunities regarding to the corporate income tax (whether or not in relation to the PBO-activities);
- Filing the corporate income tax return (if applicable);
- Assessing the tax position of healthcare- and education exemptions;
- Guiding in regard to Horizontal monitoring.
HVK Stevens Legal offers your PBO notarial and legal services. Because HVK Stevens Tax and Legal work closely together, advice can be implemented immediately. This includes incorporating a foundation and any other legal entities, or amending the bylaws of your PBO. We also actively assist you with the design and implementation of your legal structure. Additionally, HVK Stevens Legal can advice you on governance, management powers and other legal aspects. We can, of course, also be of service to other foundations (non-PBO’s).
HVK Stevens has extensive experience with the foregoing issues and focuses on the following services, among others:
- Application of the PBO-status and an advice on the advantages of a PBO-status;
- Advice on the do’s and don’ts of a PBO;
- Assessment of your institution’s policy plan;
- Preliminary consultation with the Dutch Tax Authorities concerning a PBO-status;
- Procedures regarding PBO-decisions;
- Structuring the PBO’s commercial activities;
- Fundraising from private individuals and sponsoring;
- The qualification as SIO (Social Interest Organisation (SBBI in Dutch) and support foundation SIO;
- The PBO-scan: does your institution meet the conditions?