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Institutional or commercial activity: how Italian tax law reads an association
The module’s worked examples, then cases to attempt before revealing their solution · 4 sections · 346 words · 4 min
Worked example
October chestnuts
For the world awareness day it has supported for years, an association sets up a stall in the square and hands a bag of chestnuts to anyone who makes a donation. It collects €1,800. This is an occasional public collection linked to an anniversary and an awareness campaign, so the money does not count towards the body's income.
Worked example
The three sources of money of the Lecce association
The annual fees of the 150 members, €6,000, stay outside income. The €2,700 from the photography course are specific charges: commercial unless the association can rely on the paragraph 3 exception, which is now uncertain for cultural associations. Drinks sold to anyone at the festival are not an activity towards members: they are commercial.
Worked example
A club drifting into trade
A social club collects €20,000 in fees and contributions and earns €70,000 from a bar open to the public, which has also absorbed nearly all its spending on furniture and equipment. Commercial revenue and fixed assets predominate for the whole year: the club risks losing its status and being treated as a business.
Practical case
Three sources of money for an amateur sports association
An amateur sports association with registered articles that meet paragraph 8 receives during the year €12,000 in annual fees, the same for everyone, €8,000 from members for the swimming courses it runs in pursuit of its statutory aims, and €3,000 from the annual dinner, which is also open to non-members. Which of these amounts are commercial?
Hint: Start from paragraph 1 for the fees, apply paragraph 3 to the courses provided to members, and check the paragraph 4 list for the dinner.
Show the solution
The annual fees do not count towards income (paragraph 1). The swimming courses paid for by members are specific charges, but amateur sports associations remain on the paragraph 3 list: provided in direct pursuit of the institutional aims to members, they are not commercial. The dinner is the serving of meals, which paragraph 4 always excludes from the exception, and it is also open to outsiders: that €3,000 is commercial.
Answer: Only the annual dinner, €3,000
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