11/17 2017

Announcing the Non-Profit Act

A set of laws known as the “Non-Profit Act” has recently been approved

Based on the newly enacted Legislative Decree 117/2017, statutorily recognised religious organisations may fall into the new category known as the Non-profit Sector provided:

    • They meet certain objective criteria, meaning that they have as their exclusive or primary purpose one or more activities of interest to the community at large, carried on in the pursuit of civic improvement, or social welfare or solidarity, without seeking a profit therefrom. Such activities are enumerated in Section 5 of the previously cited legislative decree. This list may be updated from time to time; it reorganises the usual not-for-profit activities (health, mutual assistance, education, the environment), and adds a few that are more recent entrants on the scene (housing, social agriculture, lawfulness, fair trade, etc.);
    • They choose to manage such activities by availing themselves of the new legal framework for non-profit entities, including new tax laws, and the new regulations on social-welfare companies;
    • Such option does not subject the organisation to secular provisions that conflict with canonical law, whether generally or specifically.
      The adoption of the provisions required by this non-profit reform will allow for entities to take advantage of a series of benefits including:

      • Social Bonus: a tax credit related to voluntary grants made to non-profit entities for specific programming presented to the Ministry of Labour to reclaim vacant public buildings, and to use assets seized and forfeited from organised criminals;
      • Tax incentives for donors and those who invest in social-welfare companies: beginning 1 January 2018, incentives will be bolstered for those who make voluntary contributions – whether cash or in-kind – to non-profit entities.
    • Immediate application of the indirect-tax exemptions: on estate and gift tax, recording, mortgage, and building/land registry tax, and for tax-revenue stamps;
    • For those entities that primarily engage in non-commercial activities, IMU and TASI tax exemption is reaffirmed, while volunteer organisations and social-welfare associations will be exempt from taxes on income produced by real estate.

Thus, those religious entities recognised by lay authorities can apply the regulations from the Non-Profit Act, but only for the aforementioned “activities of general-interest to the community”, provided they adopt bylaws for the same. These must be filed with the National Consolidated Non-Profit Registry. The entities must follow all other requirements set forth in any implementing regulations – these have not yet been enacted, but will be applicable once they are.

Timeline:

2017 September: Through a decree from the President of the Republic of Italy, the statute for the Social Italy Foundation, previously approved by the House and the Senate, will be officially promulgated.

30 September: Identification of the implementation methods for non-profit-sector tax regulations, deductibility of social investments and donations related to non-profit bonds. This package will form the notification to be sent to the European Commission.

18 November: Launch of the Prime Minister’s Decree on methods of accreditation, criteria for a division of non-earmarked donations, payment methods for the grant, and terms for “Five for 1000” beneficiary compliance.

30 November: Informal internal deadline set by the Administration for setting up the new National Non-Profit Council.

31 December: Drafting of the Guidelines and the call for tenders for allocating 60 million Euro from the Fund for Innovative Projects created by the associated entities (excluding social-welfare companies).

2018, 1 January: Effective date for incentives on voluntary donations and direct-tax-exemptions. The launch of the “social bonus” programme and the new non-profit bonds is likewise set for the beginning of next year.

3 July: Final deadline, set forth by statute, for the Administration to amend any implementing decrees for the authorising statute.

2019, January: Effective date for the new Non-Profit Registry. Adherence to the timeline will largely depend on the implementation of the necessary non-profit IT infrastructure. This legal framework will help determine which entities qualify as non-profit social welfare organisations (“Onlus”).

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