Corporate taxable

Before you know it you will be liable for corporate income tax. From the moment you make a profit of 15,000 euros or the organization makes more than 75,000 euros in profit in 5 years, corporate income tax must be paid. Foundations are intended as charities and are usually non-profit. It is not easy to raise donations and bind the right founding partners to you. Once you're bringing in investments, the last thing you want to do is pay taxes on your fundraising.

Most foundations don't get that profit quickly. Nevertheless, it is important to pay close attention. If you have insufficient insight into deductible and non-deductible costs, you run the risk of having made a profit. In retrospect, this can have major consequences. It is difficult to have these consequences corrected by an accountant. For foundations with an ANBI status, this even means that they can lose this status with such profits.
When the administration is not in order, it is quite a puzzle to find substantiation afterwards and to process it in the accounting that can prevent these kinds of consequences.

The role of the treasurer

A treasurer has the task of having a clear view of the income and expenditure so that no or not too much profit is made and a good budget can be laid down for the new year. In practice, you see that the treasurer does have a financial background, but is not well-versed in tax matters. A professional financial advisor with a tax background can explain well which costs are and are not deductible. Changes may be made by the government every year. An advisor is always aware of recent developments and finds out what applies to your foundation.

Budget

This is crucial to properly budget for the new year. A correct budget helps the foundation to gain insight into what is needed. This way you can ask for donations for a specific fundraising in a more targeted way. After all, donors are more inclined to donate in support of a specific, well-defined goal. Transparent accounting and a correct budget helps to know where more resources are needed and to plan actions to further the goal of the foundation. You do this, among other things, by checking the accounts when you think that everything has been entered correctly. Subsequent calculation offers opportunities to save money for now and or in the future. This step is sometimes skipped by the treasurer, while this is the easiest way to generate money.

Staff or not?

Foundations often work with volunteers. You must have volunteer agreements to provide transparency. You quickly run the risk of unintentionally employing people and then there is a so-called sham relationship. Allowances for volunteers may be 'only' 1800 euros per year. If that is more, it can be seen as an employer and you must pay wage tax. It is therefore crucial to have your personnel file in order and it is mandatory to keep it for the tax authorities. This way you prevent unnecessary and unforeseen costs.
You keep a close eye on what you ask of volunteers.

Questions for foundations

Are you a foundation and would you like to know how you really stand? By sitting down with our financial advisor, you will quickly gain insight into where there are still opportunities to save and create money and to use it effectively for your goal.

For more information, please contact AXJA Administrations.