Some of you may often ask about the taxes for non-profit organizations. Well, what is a non-profit organization? It is exactly an organization in which its purpose is for supporting an issue that has attracted the public. However, it is done without having any commercial intention to seek profits. The non-profit organization can be formed such as public schools, political organizations, religious organizations, voluntary organizations, public charities, clinics and public hospitals, assistance of community on legislation, or even the unions of labor. Then, is it true that this organization is looking for profit? How about the tax?
Difference between Non-Profit Institutions and Profit Institutions
There are so many things that distinguish between the two institutions. For example, in terms of ownership, it is not clear at the non-profit institution who is the owner of the institution, whether he is a member, client, or even a donor. In a profit institution, the owner will clearly benefit from the organization’s business results.
Also in the case of donors, non-profit organizations really need donors as a source of funds. In contrast to profit institutions that already have a clear funding source that comes from business profits.
Likewise in terms of the distribution of responsibilities, the profit institution will clearly know who the commissioner who then elects an executive director. Whereas in non-profit organizations, such matters cannot be done easily, because members of the board of commissioners are not the owners of the organization.
Characteristics of a Non-Profit Organization
The absence of ownership as in business organizations in general. Produce an irate or service that does not have the aim of making a profit alone, if there are profits, then the amount was never shared with the founders or owners of these organizations funds or resources that can come from contributors do not wish to benefit from what has been given.
Taxes for Non-Profit Organization
There are so many questions asking whether there will be taxes for the non-profit organization even though they don’t take advantage of anything? As an institution, non-profit organizations are also subject to tax, which means that all tax subject obligations must be carried out without exception. But not all income earned by these institutions is a tax object.
There are many countries which the opinion that non-profit organizations can apply for status as tax-exempt institutions. Therefore they will be free of income tax and other types of taxes.
Those explanations give us a good conclusion that basically non-profit institutions do not need profit. Because their orientation is not only to obtain or merely seek profit but as a social organization with the aim of being able to help those in need. Especially in terms of the economy. But if a non-profit institution makes a profit from their program or business results. Then the profit is not shared with the owners or founders of the organization.
Although a non-profit institution does not have a purpose to look for the profits. It also still needs to prepare financial reports. To conduct the preparation of these financial statements. Also by utilizing accounting software so that transparency and organizational accountability can be achieved.
Thus, the article about taxes for non-profit organizations, hopefully useful.