Disclaimer: this article is a description of our administrative procedures, which we have chosen to detail as much as possible for transparency reasons. In view of the context, we are going to talk about money rather than our activities, so that our article may eventually be used as a resource for other associations. If you are not interested, please feel free to ignore this article.
We are pleased to inform you today that the 42l association is now recognized as a general interest organization!
In August 2019, we have launched a procedure of fiscal rescript: it consists in asking the tax authorities if our activity respects the necessary criteria to benefit from this status.
🔗What advantages does this procedure bring us?
An association of general interest can issue tax receipts to its donors (individuals or legal entities), allowing them to benefit from tax reductions:
- For an individual: Up to 66% of the amount of his donation (within the limit of 20% of his taxable income);
- For a legal entity (organization): Up to 60% of the amount of its donation (up to a maximum of 20,000 euros or 5‰ of its annual revenue).
For example, if a person makes a donation of 50 euros, this donation will only cost 17 euros after tax reduction (20 euros for a company).
This also allows us to apply for fundings from a number of public and private organisations.
🔗Why did we carry out this procedure?
The tax rescript is not compulsory to be recognized as being in the general interest: it is quite possible to qualify your own associative activities as being in the “general interest” and to issue tax receipts, without asking the tax authorities. This request is optional and only serves to confirm this qualification.
However, we have preferred to seek the opinion of the tax authorities to demonstrate that even a small student association without any pretence can obtain this recognition: this leaves the door open to other small players like us, especially among the CHATONS: if your associative activity is similar to ours (popular education, awareness of digital freedom issues, hosting privacy-friendly services) then perhaps your association corresponds to the definition of an association of general interest.
🔗How did we proceed?
On 1 August 2019, we sent a registered letter with acknowledgement of receipt containing the requested form, completed, with our statutes, our internal regulations and our declaration receipt in the Journal Officiel.
We were contacted by mail post on 21 November 2019 by the Direction Générale des Finances Publiques, which asked us for additional documents to complete our file, namely :
- A moral report for the years 2018 and 2019;
- A financial report for the years 2018 and 2019, with our budget;
- Details of the activities carried out since the creation of the association, with references attesting to these activities;
- Any documents attesting to partnerships or subsidies.
Having started our activities in 2019, we expected to write our first moral and financial reports for the year 2019 in early 2020. We have therefore written preliminary reports for the administration, which can now be found here.
Our moral report also included details of the activities carried out since the creation of the association. About partnerships or grants, we had not done any such thing, so we did not transfer any other documents.
We replied in this way by email, then called the telephone number indicated a few days later to be sure that our email had been received, as a precaution.
From then on, we knew that we had to wait a maximum of 6 months for a response… which we finally received in June.
Here’s what it looks like (click on the image to access the full PDF) :
🔗General interest and free culture
We hope that our approach will encourage other associations, with whom we share our ideas and values, to ask themselves the question: “Is your activity of public interest?”
There is no need to ask the tax authorities to check whether your association falls into this category: if you think that it meets the criteria, you can issue your tax receipts and give your donors a tax reduction without asking. Your donors could thus triple the amount of their donation for the same cost.
This method is entirely legal; the obligation to ask the administration is a common misconception. However, if the administration contacts you and believes that your organization is not in the public interest, you must stop sending tax receipts immediately (check the Precautions section below).
And if you don’t need more donations, consider that not all free software associations can meet their financial needs. Imagine that your donors could give to two other associations in addition to your own, for the same cost?
Finally, this recognition is also symbolic and could give you some credibility with your public, who may never have heard of “free culture”.
Hoping that this feedback will be useful to you :)
If you wish to support our activities financially with a tax reduction, you can make a donation to the 42l association.
Thank you for your support and see you soon!
If you issue tax receipts without asking the administration, but the latter considers your activities as not being in the general interest afterwards, your association will have to pay a fine equal to the tax reduction amount of the donation.
This only applies, however, if it considers that your association does not meet its criteria. So if you issue tax receipts without asking, and then the administration studies your case afterwards and considers that you are in the general interest, nothing will happen.
As we have shown you, even a small student association can meet the required specifications, so this should not scare you if you have similar objectives to ours, but it certainly requires careful consideration.
Finally, if in doubt, you can also start the tax rescript procedure as we have done. The administration will wait for a response, but it has commitment value: it undertakes to bear the responsibility for issuing your tax receipts and cannot fine you if it decides, later, to withdraw your general interest status.
Hoping that this feedback will help you to administrate your associations.