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Value added taxation and the third sector

Published online by Cambridge University Press:  01 January 2026

Ole Gjems-Onstad
Ole Gjems-Onstad*
Affiliation:
Norwegian School of Management, P.O.B. 580, N-1301 Sandvika, Norway
*
fax 47 67570681, e-mail Ole.Gjems-Onstad@bi.no
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Abstract

During the last decades, value added taxation (VAT) has become widely used. Introducing or widening VAT may have important consequences for third sector organisations. There is no consistent, widely-accepted theory regarding the treatment of non-governmental organisations (NGOs) under VAT. International comparisons are difficult to make. The general scope of VAT, what goods and especially what services are included in the tax base, may be more important to NGOs than the direct concessions granted them. To comprehend how VAT may affect NGOs, it is necessary to understand the general mechanism and some of the technical details of VAT, such as registration thresholds and accounting requirements. There is a tendency for the legislature to widen the tax base and make VAT as general as possible. Tax administrative considerations may acquire the character of absolute principles. When VAT is introduced or widened, it may be important for NGOs to demonstrate how their tax bill has been changed as a possible unintended side-effect due to the administrative need to make VAT as comprehensive as possible.

Résumé

Résumé

La TVA est devenue de plus en plus courante ces dernières décennies. L’introduction ou l’élargissement de ce type de taxation peuvent avoir des conséquences importantes pour les organisations à but non lucratif. Il n’existe aucune théorie communément acceptée sur l’assujettissement des ONG à la TVA et il est difficile d’établir des comparaisons internationales. Le type de biens ou plus particulièrement de services qui y sont assujettis, peut avoir plus d’incidences sur les ONG que les avantages fiscaux qui leur sont accordés. Pour comprendre les effets possibles de la TVA sur les ONG il faut comprendre le mécanisme de base et certains détails techniques de la TVA, tels que le seuil d’applicabilité et les règles de comptabilité qui doivent être respectées. Il existe une tendance à un élargissement de l’assiette et à une généralisation de la TVA. Certaines consideration d’ordre technico-administratif peuvent être érigées en principes immuables. Lorsque la TVA est introduite ou élargie, il peut être necéssaire pour les ONG de démontrer qu’elles subissent alors les effets secondaires d’une simple mesure adminsitrative visant à généraliser autant que possible la TVA.

Zusammenfassung

Zusammenfassung

In den letzten Jahrzehnten ist weltweit eine zunehmende Verbreiterung der Mehrsteuer zu verzeichnen. Die Enführung dieser Steuer kann wichtige Konzequenzen für den Dritten Sektor haben. Leider fehlt es an einem theoretischen Gerüst, um die Art und Weise der Mehrwertsteuerveranlagung von Nonprofit-Organisationen besser ableiten zu können. Um nun die Konsequenzen der Mehrwertsteuer für Nonprofit-Organisationen auszustecken, geht der vorliegende Aufsatz auf die generellen Grundsätze und buchhalterischen Methoden der Mehrwertsteuerbehandlung ein.

Resumen

Resumen

Durante las últimas décadas el Impuesto al Valor Agregado (IVA) ha sido utilizado ampliamente. La introducción o el ampliamiento de dicho impuesto puede tener importantes consecuencias para las organizaciones del tercer sector. No existe una teoría ampliamente aceptada ni consistente con respecto al tratamiento de las organizaciones no-gubernamentales bajo el régimen de IVA. Las comparaciones inter- nacionales son difíciles de realizar. El alcance general de IVA, qué bienes y especialmente qué servicios se incluyen en la base impositiva, puede ser más importante para las ONGs que las concesiones directas que se les otorguen. Para comprender como el IVA puede afectar a las ONGs es necesario entender tanto el mecanismo general como algunos detalles técnicos del IVA, tales como los umbrales para registrarse y los requerimientos contables. Existe una tendencia en la legislación de ampliar la base impositiva y de hacer el IVA lo más general posible. Las consideraciones administrativas de los impuestos pueden adquirir el carácter de principios absolutos. Cuando el IVA se introduce o se extiende, puede ser importante para las ONGs el demostrar como su declaración de impuestos ha cambiado como un posible efecto secundario debido a la necesidad administrativa de hacer el IVA lo más abarcador posible.

Information

Type
Research Article
Information
Voluntas: International Journal of Voluntary and Nonprofit Organizations , Volume 4 , Issue 3 , December 1993 , pp. 372 - 394
Copyright
Copyright © International Society for Third-Sector Research 1993

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Footnotes

*

I have received valuable comments from Myles McGregor-Lowndes and two anonymous reviewers of Voluntas.

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