Becoming a "public utility

Becoming a "public utility

"Could you tell me what you need to do for an association to be declared of public interest?"

Jean, Geneva

To be recognised as being in the public interest, the association must first be registered in the tax register for legal entities. Once this has been done, it can apply to be declared tax-exempt because it is in the public interest; it must then send its complete file to the cantonal tax administration, which will send it to the Council of State for approval.

Being declared to be in the public interest means that an association is exempt from tax and does not have to pay VAT on amounts paid by sponsors or donors. The same applies when the association sponsors or makes a donation to a third party displaying the association's logo; the third party would then not have to pay VAT on the amount of the donation. In addition, donors will, to a certain extent, be able to deduct the donations they make to the association from their tax returns.

Under art. 33a of the federal law governing value added tax, the criteria for being recognised as being in the public interest are: being a legal entity that renounces the distribution of net profits in favour of its members, irrevocably allocating its financial resources to public interest purposes, carrying out an activity of general interest, and carrying out this activity in a disinterested manner.

In addition, the association must have an open circle of beneficiaries; on the other hand, its activity must depend on a notion of altruism on the part of its members. Finally, its activities must be concrete and the annual reports must reflect this activity. It is also important to stipulate in the articles of association that if the association is dissolved, its assets will not revert to the members but will be transferred to another institution with similar aims.