Non-profit organizations play a crucial role in society, providing services and support to communities without the intent of making a profit. However, they still face various tax obligations. The good news is that some may qualify for corporate tax exemption under certain conditions.
According to current regulations, a non-profit organization can be exempt from corporate tax for a tax period in which its surplus of revenue over expenses does not exceed 400,000 RSD. This exemption comes with several important conditions. For example, the organization must not distribute the surplus to its founders, members, directors, or employees. These rules are in place to ensure that the funds remain within the organization and are used for its intended purposes.
Additionally, the annual amount of personal income paid to employees must not exceed twice the average annual salary per employee in the Republic for that year. This limit helps maintain financial balance and prevents excessive wealth accumulation at the expense of those working for the organization.
Another important condition is that a non-profit organization must not distribute its assets for the benefit of its founders or related parties. Furthermore, the organization cannot hold a monopoly or a dominant market position, as regulated by competition laws. These measures are designed to ensure that non-profit organizations operate fairly and do not undermine market competition.
While corporate tax exemption is a great opportunity, non-profit organizations are still required to maintain records of their income and expenses. They must also submit a tax balance sheet and tax return. These obligations are essential to ensure compliance with the law and adherence to all regulations.
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