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The International Journal
of Not-for-Profit Law

Volume 3, Issue 3, March 2001

A publication of the International Center for Not-for-Profit Law

Table of Contents

Letter from the Editor


The State, Laws and Nongovernmental Organizations in Bangladesh
By Mokbul Morshed Ahmad

China's Nongovernmental Organizations: Status, Government Policies, and Prospects for Further Development
By Guangyao Chen

The Czech Government and NGOs in 2001
By Petr Pajas

The Italian Legal System Relating to Not-for-Profit Organizations: A Historical and Evolutionary Overview
By Alceste Santuari


The Legal System Between the State and Civil Society
By Jurgen Nautz, Emil Brix, and Gerhard Luf
Reviewed by Thomas Notter

Foundations of Charity
By Charles Mitchell and Susan R. Moody
Reviewed by Karla Simon

Case Notes

Middle East and North Africa:

North America:
the United States

Country Reports

Asia Pacific:
| Australia | Cambodia | Indonesia | Japan

Central and Eastern Europe:
Regional | Albania | Lithuania

Latin America and the Caribbean:
Brazil | Chile | Venezuela

Middle East and North Africa:

Newly Independent States:

North America:
the United States

South Asia:

Sub-Saharan Africa:
| Ghana | South Africa

Western Europe:
France | Germany

Self-Regulation Reports

Northern NGO Guidelines and Codes of Conduct: Conflicting Rights and Responsibilities?
By Julie Gale

Building Trust in NGOs
By Simon Heap

Nigeria: Draft Code of Standard Practice for NGOs

Switzerland: New Accounting Rules for Not-for-Profit Organizations (NPOs)

International Grantmaking

Bar Association Task Force Revisits Private Foundation Rules: Implication for Foreign Grantmaking
By Richard S. Gallagher

Donating to U.S. Charities
By Arthur B.C. Drache, Q.C.

The Council on Foundations Secures Information Letter that Permits Use of Expenditure Responsibility for Most International Grants


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Editorial Board

Country Reports: Central and Eastern Europe


Survey of Tax Laws Affecting NGOs in Central and Eastern Europe

ICNL soon hopes to make available its Survey of Tax Laws Affecting NGOs in Central and Eastern Europe. The survey examines current tax laws governing non-governmental organizations (“NGOs”) in fourteen countries in Central and Eastern Europe.  The fourteen countries are: Albania, Bosnia & Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Macedonia, Poland, Romania, Slovakia, and Yugoslavia.  The paper is based on responses to a survey questionnaire regarding tax laws and regulations pertaining to NGOs provided by experienced attorneys in each of the subject countries. The survey questionnaire asks for information about the laws on income or profits taxes for NGOs; exemptions from such taxes available to NGOs; the treatment of income from business and investment activities; the application of, and exemption from, other taxes, such as real estate, gift and inheritance, and value-added taxes; and the availability of tax credits or deductions to individuals and businesses that donate to NGOs. Relevant provisions of the laws of the fourteen countries are summarized in charts appended to the survey.

The survey has two purposes. The first is informational; the survey compiles information regarding the tax laws applicable to NGOs as they currently exist. The second is analytical. The paper seeks to identify those areas in which reform of the tax laws in the region would help to bring those laws into conformity with international good practice, thereby improving the enabling environment for NGOs and enhancing their ability to sustain themselves financially.

The survey reveals that most countries in the region have made some progress towards modernizing their tax laws and creating a fiscal enabling environment for NGOs. Most of the countries, for example, have laws granting tax exemptions to certain NGOs for at least some sources of income. In addition, most have extended tax benefits, usually deductions, to individuals and businesses that donate to certain types of NGOs.

Moreover, several countries have developed innovative practices that can serve as models for the rest of the region, as well as for countries outside of Central and Eastern Europe.

There are a number of areas, however, in which reform of the existing tax laws in the region is necessary in order to ensure the continuing financial sustainability of NGOs. The survey first discusses the tax laws affecting NGOs in the countries of the region. It then analyzes those areas in which reform is most necessary if these countries are to provide a strong fiscal enabling environment for the NGO sector.


The Albanian Parliament enacted a package of new NGO laws on May 3 and 7, 2001. The package consists of the Law on Nonprofit Organizations, the Law on the Registration of Nonprofit Organizations, and accompanying Civil Code amendments. These laws represent the culmination of a four-year effort by NGO leaders and government officials to create a more appropriate legal framework for NGOs in Albania.

There was extensive public participation in the law-drafting process. An NGO-government drafting group worked on the laws, the government published the drafts in leading newspapers, and the government held its first-ever public hearing on the NGO law.

The legislative package contains a number of significant provisions, including the following:

IJNL hopes to carry a more substantive article on these legislative developments in an upcoming issue.


On 11 July 2000 the Seimas (Parliament) adopted two laws, Law VIII-1811 and Law VIII-1812, amending respectively the Law on Charity and Sponsorship and the Law on Profit Tax of Legal Entities. Both laws are effective from 1 January 2001. As revised, the law recognizes 8 classes of charity beneficiaries:

The law also lists 8 categories of permitted beneficiaries of sponsorship:

The revised profits tax law provides that legal entities providing charity and sponsorship in accordance with the Law on Charity and Sponsorship can deduct the expenses incurred up to a limit of 40% of gross taxable profit. Where the support is given in kind, the deductible amount is generally equal to the cost of the goods or services provided. In the case of tangible assets with a long life, the deductible amount of a gift of such an asset is limited to the residual value of the asset; if the asset is merely lent to the beneficiary for a limited period, the deductible amount is equal to the amount of depreciation of the asset applicable during the period of use.


Copyright © 2012 The International Center for Not-for-Profit Law (ICNL)
ISSN: 1556-5157