Find out what it is and how to create a voluntary association. This non-profit is established through the signing of the articles of association and the statute. Let’s see in detail the steps to follow to open an ODV and all the costs to be incurred to proceed with the registration and further formalities.
What is a voluntary association: legislation and requirements?
The voluntary association or organization (ODV) is a non-profit organization that pursues solidarity purposes of general interest by making use of the voluntary service of its members (Article 32 of Legislative Decree no.117 / 2017). The activity of this association is generally carried out in favor of people in need or belonging to the most disadvantaged categories such as the elderly, disabled or homeless.
To start this association, the following requirements must be met:
- Absence of profit – the activity must not be carried out with the aim of obtaining profits neither for the associates nor for the administrators. As with all other types of association, in fact, there is a ban on the distribution of profits to members and the obligation to reinvest them only in the associative activities.
- 7 founding associates – this is the minimum number of people required to found an ODV. Alternatively, the organization can be founded by 3 existing voluntary associations
- Volunteering at no charge – associated volunteers they cannot be remunerated in any way or by the organization itself or by the beneficiaries. It is only possible to receive a possible reimbursement of expenses for the activity provided. An ODV can in any case make use of paid employees or self-employed workers, provided that the number does not exceed 50% of the volunteers. To give an example, if the institution has 15 volunteers, it will only be able to use 7 paid workers.
The recent reform of the third sector has reorganized the entities with solidarity and social utility purposes under a single large family. With the full entry into force of this reform, voluntary associations together with those of social promotion will automatically become Third Sector Entities (ETS). Currently the reform is not fully implemented as the establishment of the single register in which the ETS will have to register (RUNTS) and some implementing decrees are expected.
How to set up a voluntary association: statute and deed of incorporation
To establish an ODV, the signature of the 7 founders on the deed of incorporation and the statute is sufficient. In fact, the intervention of a notary is not necessary, unless you want to create a recognized association to prevent the administrators from responding with their personal assets for any debts of the entity. However, this choice is rare and is used only by associations with large assets (minimum € 15,000) and numerous associates.
The deed of incorporation and the statute of the association are the documents that regulate the functioning of the organization and report the relevant data of the same. The deed of incorporation contains, for example, the name of the entity, the data of the founding members and administrators, the place of incorporation and the registered office. The statute, on the other hand, establishes the rules on administration, on the functioning of the assembly, on the membership and exclusion of shareholders, etc.
With our association constitution service, you can create customized articles of incorporation and statute online. You will also receive the advice of an experienced professional and our complete guide for all requirements. In addition to the constitution, 1 year of 100% online legal support is included to create tailor-made contracts and request consultations with experts for all the needs of the new business.
The next steps to open an ODV: tax code and registration
Let’s see now what are the steps to follow after the constitution to start the non-profit. If you choose the LexDo.it service, our professionals will guide you through each step.
1. Request for the tax code or opening of the VAT number
First of all, you need to apply for the tax code to the Revenue Agency. The code is necessary to be able to carry out any operation (e.g. opening a current account, purchasing goods). If, on the other hand, the entity also habitually carries out commercial activities, instead of requesting the tax code, a p. VAT by association. Generally, they are commercial paid activities for non-associated persons or activities qualified as such directly by the law (eg administration of food or beverages).
2. Registration with the Revenue Agency
After obtaining the tax code or VAT number, the deed of incorporation and the articles of association must be registered to make the ODV known to third parties. Registration is done with the Revenue Agency within 20 days from the date of incorporation and is one of the steps necessary to obtain the tax benefits provided for non-profit activities.
3. Registration in the regional register of volunteering
To access the tax benefits, it is also necessary to register in the regional register of volunteers. The documents demonstrating the registration of the deeds with the Revenue Agency must be attached to the application form. Each region provides different procedures for the registration procedure, therefore it is advisable to consult the site of the region in which your association is based to know every detail.
4. Transmission of the EAS model
The EAS model is a fiscal document that non-profit organizations are obliged to present within 60 days from the date of incorporation. With this fulfillment, some data on the activity and income of the association are transmitted to the tax authorities in order to have access to some tax breaks. The model can only be submitted electronically and it is advisable to have the support of a professional for filling in and sending it.
Costs to create an ODV
As seen above, the intervention of a notary is not required to set up the institution, therefore no costs are foreseen for the establishment. The founders can independently draw up and sign the constitutive documents. However, it is important to have the assistance of a professional at this stage to avoid making mistakes in the drafting and to make the most convenient choices.
The assignment of the tax code is free, as is the registration as for voluntary organizations there is an exemption from the payment of registration and stamp duties. However, it is advisable to check with the offices of the Revenue Agency of the municipality in which the association is based in the exemption is confirmed for your ODV. In the absence of this confirmation, € 200 must be paid as registration tax. If you need to open p. VAT, there are no taxes for the opening but it is advisable to contact a professional for accounting management.
Finally, registration in the regional register is generally free. However, as anticipated, you must always check with your region of belonging as in some cases there may be costs (eg revenue stamps).
With our constitution service, creating your association costs € 99 + VAT. You’ll have included the bespoke online charter, advice from an experienced professional, and our comprehensive guide to all the steps after setting up your organization.
The voluntary association, as a non-profit organization, benefits from some tax breaks. The concessions can concern both the revenues that the body collects from the members for participation in the institutional activity (eg assistance of volunteers to disadvantaged people) and the revenues for commercial activities such as the sale of gadgets, sponsorships and more generally payments received from non-associated third parties.
ODVs benefit above all from the non-taxation of revenues relating to institutional activities. These include, for example, the membership fees, the financial contributions paid by the members for the activities carried out, any donations received.
For commercial revenues, on the other hand, it is possible to adhere to the facilitated tax regime provided for by law 398/1991. Initially introduced only for sports associations, this regime was then extended to other non-profit organizations as well. Among the advantages there is the exemption from the application of VAT, the obligation to invoice and the application of a tax rate of 3% on revenues that do not exceed € 400,000 per year.
As soon as the reform of the third sector comes fully into force, the tax regime described above can no longer be applied by voluntary associations. However, it will be possible to adhere to the new tax measures that will provide for a flat rate taxation with a reduced rate on commercial revenues not exceeding € 130,000. In any case, the definitive implementation of the reform and the scrutiny of the European Commission are wait in order to know precisely the new provisions.