France Nonprofit & Associations Tax Guide

French nonprofit and association taxation. The guide covers: the association loi 1901 (the "association régie par la loi du 1er juillet 1901") — the standard legal form for the French nonprofit organisations; the association loi 1901 is a "contrat" (a contract) between the members (the "membres") who agree to pursue a common purpose other than the profit (the "objet autre que le partage des bénéfices"); the association is subject to the corporate tax (IS) only if it engages in the commercial activities (the "activités lucratives") — the association is exempt from the corporate tax if it meets the "3P test" (the "test des 3 P"): (a) the product (the "produit") — the association's product or service is of general interest (the "intérêt général") and is not offered to the business market (the "marché concurrentiel"), (b) the price (the "prix") — the association's price is not competitive with the commercial sector (the "prix non concurrentiel"), (c) the public (the "publicité") — the association's management is disinterested (the "gestion désintéressée") and the association does not distribute the profits to the members (the "non-lucrativité"); the commercial activities (the "activités lucratives accessoires") — if the association engages in the commercial activities (the "activités lucratives"), the association is subject to the corporate tax (IS) on the commercial income only (the "sectorisation" — the association must separate the commercial activities from the non-commercial activities); the association is also subject to the VAT (the "TVA") on the commercial activities if the annual turnover exceeds the thresholds (the "seuils de TVA" — €98,300 for the services and €254,000 for the goods); the association may be subject to the territorial economic contribution (the "CET" — the "CFE" and the "CVAE") on the commercial activities; the donation tax receipts (the "reçu fiscal" — the "donation receipt") — the association can issue the "reçu fiscal" (the tax receipt) to the donors if the association is recognised as a "donation-eligible organisation" (the "organisme d'intérêt général" or the "organisme reconnu d'utilité publique"); the donor can deduct the donation from the taxable income: (a) the individual donor: the donation is deductible at 66% of the amount donated (the "réduction d'impôt") up to 20% of the taxable income (the "plafond de la réduction"), (b) the corporate donor: the donation is deductible at 60% of the amount donated (the "réduction d'impôt") up to 0.5% of the turnover (the "plafond de la réduction"); the foundation tax rules (the "fondation reconnue d'utilité publique" and the "fondation d'entreprise") — the foundations are subject to the same tax regime as the associations (the exemption from the corporate tax for the non-commercial activities and the taxation of the commercial activities); the foundations must apply for the "reconnaissance d'utilité publique" (the "RUP" — the recognition of the public utility) from the Conseil d'État; the tax on the salary fund (the "taxe sur les salaires") — the associations and the foundations are subject to the "taxe sur les salaires" (the payroll tax) at the progressive rate (4.25% to 13.60%) on the gross salary fund if the association is not subject to the VAT (the "assujettissement à la TVA"); the association must file the annual tax return (the "déclaration annuelle des résultats" — form 2070) if the association is subject to the corporate tax; the association must also file the annual accounts (the "comptes annuels") with the prefecture (the "comptes déposés à la préfecture") if the association receives the public subsidies (the "subventions publiques") over €153,000 or the donations over €153,000. All amounts in Euros (EUR). For related reading, see our Corporate Tax Guide → and VAT Guide →.

3P Test — Non-Profit Exemption

Product (general interest): The association's activity must serve the "intérêt général" (the general interest). The activity must not be restricted to the members only (the "cercle restreint"). The activity must be open to the public (the "publicité des activités"). The typical general interest activities include: the education, the health, the social services, the culture, the sports, the environment, and the humanitarian aid.
Price (non-competitive): The association's price for the service or the product must be lower than the commercial sector (the "prix non concurrentiel"). The price must be set based on the cost of the service (the "prix de revient") and must not generate a profit (the "marge bénéficiaire"). The association must not use the aggressive marketing techniques (the "méthodes commerciales agressives").
Public (disinterested management): The association must be managed by the volunteers (the "bénévoles") or the paid managers who are not the members of the board (the "dirigeants non membres du conseil d'administration"). The association must not distribute the profits to the members (the "non-lucrativité"). The assets of the association must be dedicated to the general interest (the "affectation des biens à l'intérêt général").

For the reçu fiscal (the donation receipt) and the donor tax deduction, see our Personal Tax Guide →.

Commercial Activities — Taxation

Corporate tax: The association is subject to the corporate tax (IS) at the standard rate (25% or 15% for the SMEs on the first €42,500 of the profit) on the commercial income (the "bénéfice imposable"). The association must file the annual tax return (the "déclaration de résultat" — form 2070). The association can deduct the expenses related to the commercial activities (the "frais liés à l'activité lucrative").
VAT: The association is subject to the VAT (the "TVA") on the commercial activities if the annual turnover exceeds the thresholds (€98,300 for the services, €254,000 for the goods). The association can apply for the VAT exemption (the "franchise en base de TVA") for the small-scale commercial activities (the "petites activités lucratives") under the thresholds.

For the VAT exemption for the associations (the "exonération de TVA pour les associations") and the specific VAT rules, see our VAT Guide →.