Lhe alerts on the financial difficulties encountered by associations have multiplied in recent years. Faced with a decline in public subsidies, these structures have often persevered by seeking other sources of financing. Some have opted for a model consisting of developing a commercial activity whose profits are re-injected into carrying out missions of general interest. An association which works in favor of medical research, for example, is entirely authorized to self-finance it through the sale of patents. Allowed, but not really encouraged.
If it is understandable that a State in search of 20 billion savings per year does not have the capacity to provide support to an entire sector, at least it must be careful not to discourage initiatives towards more ‘financial autonomy. The development of a commercial activity should therefore at least be subject, for an association, to a lenient tax regime.
Indiscriminate application of European doctrine
However, this is not the case: exceeding a threshold of a few tens of thousands of euros in annual revenue results in liability to corporate tax at the common law rate.
Thus, an association providing free homework help to children from disadvantaged backgrounds may choose to finance this activity through a parallel commercial educational support activity. But it is then exposed to a tax levy on its surpluses, which will further reduce the funds devoted to helping children in difficulty…
Placing a mission of general interest at the heart of your project and not the enrichment of a few therefore does not confer any advantages: the tax treatment reserved for profits intended to be distributed in the form of dividends is the same as for those which are intended to finance virtuous projects.
It is difficult not to see behind this rule yet another example of indiscriminate application of the European doctrine of undistorted competition. Because, in this story, the French State is guided by its fear of creating a distortion to the detriment of commercial companies, preferring to abandon associations to their fate – with the exception of those which are confined to areas shunned by the market because not very promising, or who opt for a commercial positioning which distances them from any prospect of profitability.
A common good
Is it this fear which also leads to sanctioning associations whose commercial activity is insufficiently incidental by purely and simply removing them from the favorable tax system for patronage?
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