A CLEAR OVERVIEW OF 2023’S MAJOR DEADLINES FOR NON-PROFIT ORGANISATIONS
An article provided to us by our partners at EY Law.
Non-profit organisations[1] (hereafter: “NPO”) undoubtedly face many legal, tax, and administrative obligations. For you to find your way around in this legal, tax, and administrative tangle in 2023, EY Law Non-Profit & Trade Associations Team has put together in this article most of the relevant deadlines your non-profit organisation will have to respect in 2023. This article has been designed to be used as a roadmap allowing your organisation to navigate through its main legal, tax, and administrative obligations in 2023. So enjoy the holiday season, keep calm, and don’t miss the deadlines.
I. January 31/March 31, 2023 – Notification for mixed/partial VAT-taxable NPOs (NEW!)
Many NPOs (depending on their activities) qualify as mixed or partial VAT-taxable persons as a result of which the VAT incurred on incoming costs is only partly deductible which is called the “real use method”. Until now, the application of the real-use method required pre-approval from the Belgian VAT authorities. As of January 1st, 2023 this pre-approval will be replaced with a prior e-notification to be done for the mixed or partial VAT-taxable NPO. This prior e-notification is twofold:
First, communicating the application of the real use method via forms for new VAT-taxable persons or existing VAT-taxable persons. This new prior notification should in principle be done before the end of the first reporting period, i.e. for existing VAT-taxable persons: before January 31, 2023, for monthly VAT returns, or March 31, 2023, for quarterly VAT returns. Also mixed or partial VAT-taxable persons currently already applying this method should perform this prior notification before July 1st, 2023; and
Second, communicating detailed information regarding the percentages of VAT incurred in relation to the VAT-taxable, VAT-exempt/out of scope, and both activities, and on the special pro rata determined for the overhead costs. This should be done in one of the first 3 Belgian VAT returns for monthly VAT returns or the VAT return of the first quarter for quarterly VAT returns.
We also remind you that the Belgian VAT return must be filed by the 20th of the month for monthly VAT returns or for quarterly VAT returns following the reporting period.
II. March 31st, 2023 – Filling out the compensation tax return
NPOs are subject to an annual wealth tax called “compensation tax for inheritance tax” (hereafter: “compensation tax”) from January 1st which follows the date of their constitution onwards. Certain entities are excluded from the scope of application of the compensation tax. These include, among others, foundations of public utility, de facto associations, foreign non-profit associations or foundations as well as taxable entities whose taxable basis is lower than 25.000 EUR. The filing of a compensation tax return is compulsory for all legal entities subject to the tax and should occur at the latest within the first 3 months of the relevant tax year, i.e. at the latest on March 31.
III. March 31, 2023 – Annual VAT sales listing
The deadline to submit your NPO’s annual VAT sales listing (i.e. the annual return quoting all VAT liable clients or customers to whom the NPO has sold goods or provided services) is March 31, 2023.
IV. Within 6 months after the end of the financial year – Approval of the annual accounts and the budget
NPOs are legally required to keep financial records and prepare annual financial statements. The exact extent of these obligations depends upon the size of your NPO. However, as a general rule, within 6 months after the end of the financial year, the general assembly for (international) non-profit associations and the board of directors for foundations shall approve (i) the annual accounts for the last financial year and (ii) the budget for the ongoing financial year.
Subsequently, the annual accounts must be filed with the clerk’s office of the Enterprise Court or the National Bank of Belgium (depending on the size of your organisation) within 30 calendar days after approval and at the latest seven months after the date of closure of the financial year.
V. Within 30 days - Administrative and publication formalities
Several events that occur in the life of an NPO entail for it the obligation to carry out administrative and publication formalities, (i) filing with the clerk’s office of the Enterprise Court, (ii) publication in the Annexes to the Belgian Official Gazette, and (iii) amending of the data in the Crossroads-Bank for Enterprises. These events are mainly any changes regarding the composition of the board of directors, the person in charge of the daily management, the statutory auditor, the address of the registered seat, an amendment to the articles of association (hereafter: “AoA”), etc.
When these events occur, the NPO must file the document(s) evidencing the latter with the clerk’s office of the Enterprise Court within 30 days.
VI. At least once in 2023 – Update/confirm the data of your NPO in the UBO register
It is important to remember that registration with the UBO register is not a one-time obligation. Indeed, the UBO register must, in fact, always be up to date. The UBO register must be updated within 1 month if there is a change in the information recorded, and the information included in the UBO register must be updated/confirmed by the NPO at least once a year.
Failure to comply with its UBO obligations may result in personal fines for the NPO’s directors and person in charge of the daily management but above all your bank may block your bank accounts. Therefore, updating the UBO register in time shall not be overlooked.
VII. October 1st, 2023 – Legal entities/corporate income tax
Under Belgian law, regardless of the date of the ordinary general assembly, NPOs have 7 months from the date of their annual accounts to submit their legal entities/corporate income tax return. However, for the NPO whose financial year ends on December 31, the Belgian tax administration allows them to file their legal entities/corporate income tax return by October 1st, 2023.
VIII. January 1st, 2024 – FINAL deadline to put your articles of association into compliance with the companies and associations' Code
Last but not least, as you all know, every NPO is obliged to bring its articles of association into line with the provisions of the “new” companies and associations Code by January 1st, 2024, at the latest.
If your organisation did not yet start to work on this compliance process, we strongly recommend that this become a priority in early 2023 as this can be a time-consuming process.
[1] Belgian non-profit associations, international non-profit associations, private foundations, and foundations of public utility.
If you have any questions or concerns related to non-profit law, Antoine DRUETZ, Associate Partner, and Alix DEGREZ, Counsel will gladly assist your organisation.