How does tax affect PTAs?
Obligations to the Tax Authorities
PTAs are governed by the same obligations as those governing Federations and Confederations. These have to meet the following conditions:
- Register with the Tax Authorities.
- Declare themselves exempt from Tax on Associations if they do not have economic activities and do not exceed €50,000.
- File every year the return on transactions with third parties, form 347 both when receiving income or purchasing services from a natural person or a legal entity. Whenever this exceeds €3,000 VAT included.
- File an annual return if they receive donations from third parties.
- Apply and pay VAT and apply Income Tax withholdings on the rental of premises where applicable. Also make quarterly payments of sums withheld for Income Tax.
- Pay the annual Property Tax if the premises are owned.
- In the event of contractual relationships with self-employed people or staff contracted they have to apply Income Tax withholdings. Make the payments, file the quarterly returns and the annual summary.
What other possibilities are there?
For PTAs there is the possibility of becoming social collaborators and so easing the filing of returns. An agreement has first to be reached between the PTA and the Tax Authorities.
The activities of the PTAs will be supervised by monitors and to be able to arrange it the following criteria have to be satisfied:
- Volunteer associates: Cannot receive any financial compensation, but can, on producing the relevant vouchers, be reimbursed for expenses.
- Outside volunteers: Again, no financial compensation, as set out in the law on voluntary work. There has to be an agreement signed between the volunteer and the PTA including insurance for the volunteer.
- A worker engaged by an outside company: This only requires a contract to be signed between the company and the association, requiring it to produce a certificate of being up-to-date with social security.
- For the self-employed: Both parties have to sign a service contract, requiring receipts for the payment of self-employed contributions.
- The PTA employs staff: In this case it must comply with all the requirements set out in the Statute of Workers’ Rights, and all current legislation.
Other advice to take into account
Apart from all the above, PTAs have to follow a series of points when dealing with management of the association.
Among all of these, we would emphasise the following:
- All payments have to be made through a bank so that they are always recorded.
- Making all the applicable withholdings, returns and payments concerned with taxes.
- All expenses paid for as subsistence must be duly vouched (tickets, invoices, etc…) and can only be for authorised individuals. These sums cannot exceed the limits set in the Income Tax Regulation.
- No contracts can be signed for periods of more than one year. A new contract has to be signed for each school year.
It is important to be up-to-date with all the laws concerned with the administrative and tax functions of our association. Going through all the steps necessary to comply with our tax obligations and in the event of doubt, consulting a specialist and asking for advice.