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EP study on a statute for EU cross-border associations & NPOs

July 20th, 2021

The European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs has published a study providing an analysis of the main legislation on Non-Profit Organisations (NPOs) in force in selected European Member States (mainly Belgium, France, Germany, Ireland and Italy). It also discusses the need for a potential legislative initiative of the European Union on a European statute for EU cross-border associations & NPOs.

The study recommends the following:

  • An EU legal statute for non-profit organisations should be introduced.
  • This EU statute, to be introduced by an EU directive based on art. 50 TFEU, should establish a new legal status or label, that of “European Third Sector (or Social Economy) Organisation”.
  • The EU statute should identify the requirements for the acquisition and maintenance of this European status/label in accordance with those employed by national legislation. In particular, the status should only be made available to:
    • Private organisations which, regardless of the legal form of incorporation,
    • exclusively pursue public benefit purposes,
    • operate under an “asset-lock” regime (capital remuneration is allowed only to a limited extent), even at the time of their dissolution,
    • are subject to specific governance and transparency obligations,
    • are registered in a specific register, and
    • are subject to public control to verify their compliance with the qualification requirements.
  • This EU directive should provide for the obligation for all Member States to introduce this European status and to grant all organisations holding the status the same treatment, also under tax law, regardless of their country of incorporation (and without the need to check comparability).
  • The EU directive might authorise Member States to identify, in transposing the directive, more stringent or additional requirements for the qualification.
  • The EU directive should establish common guidelines that all Member States should follow when exercising control over the national organisation holding the European status.

You can read the study in full here.