Are you looking for information on how to open a cultural association? Below is a guide on what it is, how to set it up, what costs must be incurred and what is the applicable tax regime.
What are cultural associations and why to set them up
The cultural association is a non-profit organization. It is a non-profit organization made up of a group of people who decide to associate permanently to carry out and/or promote cultural activities. Anyone who shares the purpose and intentions of the cultural association can become a member by applying and accepting the rules established in the statute.
Associations of this type will be able to take care of all the activities that are connected to the cultural/artistic world and to training and educational activities (for example a film forum, a reading club, a group to promote the restoration of a monument). These associations can also be called private clubs or clubs (for example a jazz club or club). If the association does not have the cultural purpose as its institutional purpose, it will be necessary to set up another type of body (for example, if you want to promote a sporting activity, an amateur sports association or “ASD” must be established).
Carrying out cultural activities through an association allows you to take advantage of numerous tax breaks such as:
- the exemption from the payment of taxes for the income deriving from the institutional activity of the entity
- exemption from VAT payment
- the possibility of accessing the 2 per thousand contributions (for associations that have existed for at least 5 years)
The recent reform on the Third Sector (ETS) has reorganized under a single-family the entities that pursue civic, solidarity and social utility purposes. Cultural activity, if of social interest (eg with educational purposes or for the protection and enhancement of cultural heritage) can be included among the activities pursued by the ETS (Third Sector Entities). Even a cultural non-profit can therefore become an ETS and enjoy the related tax benefits provided.
How to create a cultural association: requirements and steps for the constitution?
Minimum requirements are required to establish a cultural institution. First of all, it is mandatory that there is a minimum number of 3 founding associates. It is necessary the absence of the purpose of profit in carrying out the activities that the association carries out. Finally, it is obviously essential that the purpose and aims that the cultural association intends to pursue are cultural activities. The steps to start your own cultural association are:
- Drafting of the statute and the deed of incorporation: the first phase is the drafting of the statute and the deed of incorporation of the association. The founding members established in these documents the purposes (specifying the purpose of carrying out and/or promoting cultural activities), the administration, the management of the heritage, and all the general rules both regarding the functioning of the organization and regarding the rights and duties of the members.
- Signatures of the founders and constitution: after drafting it will be necessary to sign the constitution and statute to complete the constitution. It will not be necessary for this to happen before a notary. The signing of all the founders is sufficient to give life to the association and to proceed with the subsequent operations.
- Registration and tax code: the president of the association will have to ask for the attribution of the tax code and the registration of the association to the Revenue Agency in order to carry out certain operations (for example opening a current account or signing contracts) and access the sector tax breaks. These steps are not strictly mandatory but by choosing not to carry them out, the entity will be very limited in its activities and will remain a sort of “private agreement” between the members.
- Request for VAT number: it is necessary to open the VAT number if the association carries out the commercial activity (for example the sale of goods or services) on an ongoing basis, that is to say using a stable organization of means and people. This type of activity must always be auxiliary and never prevalent with respect to the institutional activities of the entity. If the commercial activity is occasional, it is not necessary to open a VAT number.
How much does it cost to open a cultural non-profit?
The founders will have to bear a number of costs to open the association. First of all, it is necessary to create the articles of association and the statute. It is not necessary that these documents be drawn up by a notary, it is always recommended, however, to contact a professional or a service such as LexDo.it to avoid irregularities in the documents, make sure that the statute does not present defects and is valid for the type of association that is being formed.
The intervention of the notary is mandatory only if you want to establish a recognized association. This operation allows the ” recognition of legal personality“, which allows the creditors of the association to be able to attack only its assets in case of debts, without being able to attack the assets of its administrators. To proceed with the recognition, it is, therefore, necessary to have the deed of incorporation and the statute drawn up by a notary (public deed) and the payment of a minimum patrimony of about € 15,000 (a different minimum patrimony may be required depending on the region of belonging), a notary is around € 1000. For this reason, it is an infrequent choice and the “unrecognized” form is preferred at least initially.
You can then proceed with the request for the tax and registration code to give a certain date to the establishment of the entity, to obtain tax benefits, and to carry out certain activities such as opening a current account or entering into contracts. If you decide to carry out this operation, you must pay the related taxes of about € 250 (€ 200 + the necessary revenue stamps) and the registration must be made within 20 days of the establishment by the president of the association at the Agency of the Come in.
An additional cost is a request for a VAT number. As already mentioned, it is not mandatory to activate a VAT number for a cultural institution but it becomes so if the association carries out commercial activity on an ongoing and habitual basis. In these cases, it is advisable to contact a professional (for example an accountant) who deals with the practice of opening the VAT number. It is always advisable and recommended that an accountant follow the accounts of the association because the rules on the matter are particularly complex. Generally, the remuneration of a professional who takes care of these activities starts from around € 1000 per year.
With LexDo.it, you can set up your cultural association at a cost of € 99 + VAT. The service includes the free creation of the statute and the deed of incorporation of your association, the advice of a professional and a complete guide to all subsequent obligations such as the request for registration and the tax code or the opening of the VAT number of your no. profit. In addition, the service includes 1 year of 100% online legal support to create tailor-made contracts and request consultations with lawyers for any need.
Advantages of a non-profit cultural institution
From a fiscal point of view, the cultural association as a non-profit organization benefits from non-taxation on all institutional revenues. These include the shares or financial contributions that the members pay for the main activity of the body, for example for attending courses. These revenues are not taxed in any way and can be collected without the need to issue an invoice and have a VAT number. It is also possible to carry out commercial activities which, however, must be exercised in a manner that is not prevalent with respect to institutional activities.
Non-profit organizations can also benefit from a flat-rate tax regime that guarantees exemption from paying VAT. Associations wishing to benefit from this facility must not produce revenues from commercial activities exceeding € 400,000 per year.
The tax relief system described above will be repealed and replaced by new tax benefits when the reform of the Third Sector Entities (ETS) comes into full force. This reform introduces several changes also from the fiscal point of view, such as the distinction between non-commercial and commercial revenues. Under the new rules, non-commercial revenues will not be taxed in any way while commercial revenues will benefit from a flat-rate taxation regime provided that commercial revenues do not exceed non-commercial ones.