Taxation and Non-Profit Organizations

Country Reports: Central and Eastern Europe

The International Journal
of Not-for-Profit Law

Volume 1, Issue 4, June 1999


As discussed in the last issue of IJNL, an Albanian NGO-government working group is drafting a new Law on Non-Governmental Organizations. The draft is extremely progressive, particularly considering the current situation in Albania.

Interestingly, the government made the NGO law a priority during the midst of the Kosovo crisis. In June, ICNL provided final comments to the working group. Later that month, the Ministry of Justice and the Ministry of Labour, Social Affairs and Women jointly presented the draft law to the Council of Ministers, where it is awaiting consideration. NGO representatives and government officials expect the Council of Ministers to approve the draft in the near future, at which time it will be forwarded to the Parliament.


Three legislative drafts designed to govern NGO status, registration, activities and other related issues, were introduced into Parliament at the beginning of 1999 – the draft Law on Organizations with Non-Profit Purposes; the draft Law on Legal Persons with Non-Economic Goal; and the draft Law on Non-Profit Organizations. The legal reform process was supported by a broad campaign organized by the NGO community in the country.

A recent initiative of USAID and ICNL resulted in a public symposium, held in Sofia on June 16, 1999, with the participation of diplomats, parliamentarians, politicians and NGO leaders. The forum has demonstrated broad support for the work of the newly-appointed legislative working group, consisting of parliamentarians and NGO law experts. The working group is expected to prepare a final single draft NGO law out of the three drafts, and to submit it for introduction into Parliament in the early fall. Despite certain differences among the drafts introduced so far, they all contain positive provisions reflecting the modern tendencies in NGO legislation throughout the world. It is also expected that the final draft will introduce for the first time the concept of Public Benefit Organizations, with the opportunity to provide for tax and other benefits to organizations that serve the public interest.

ICNL will continue to provide assistance to the success of the legislative initiative, including collaboration with the members of the working group and technical cooperation on the preparation of the combined draft.

The continued efforts in the legislative field following the enactment of a new NGO law will focus on tax laws affecting NGOs. In particular, benefits will be sought for individuals who make contributions to Public Benefit Organizations, and preferential tax treatment for economic activities of NGOs. The objective of these initiatives will be to promote NGO economic self-sustainability at a time that support from abroad is declining.

The Guidelines for Laws Affecting Civic Organizations prepared for the Open Society Institute, will soon be published in Bulgarian.


Now that the Law on Citizen Associations and Foundations has been enacted, the focus is on implementation, training and education projects. (Please see IJNL issue #2 for a summary of the Macedonian law.) Specifically, the drafters of the law — Prof. Borce Davitkovski and Dr. Natasha Gaber — are working with ICNL on the following projects:

  1. NGO Law Commentary. The drafters have completed the official commentary on the law. This is an important document because it interprets the law in a liberal manner and provides practical guidance to NGOs, judges, and other interested parties. The commentary will be published this summer and will be distributed to NGO representatives, judges, government officials, and other interested individuals.
  2. Judicial Training. The drafters and ICNL are developing a project with the Macedonian Judges Association and their Center for Continuing Education (CCE) to train judges at all levels and their law clerks on the NGO law. This summer, CCE will send out a questionnaire to judges inquiring about current issues. Training sessions
    will be held in September and October.
  3. Information for NGOs. ICNL has funded the drafters of the law to provide free legal consultations to NGOs on legal framework issues. In addition, the drafters and ICNL are developing a project to train lawyers from around the country on NGO law, who will in turn provide consultations to NGOs in their respective communities
  4. Educational Initiative. ICNL and Vice Dean Davitkovski taught a lecture on NGO law in May. The drafters and ICNL are now working on a textbook on NGO law, which will be used to integrate NGO law into a number of pre-existing courses.



The NATO allies are developing plans to ensure that Kosova’s economy is insulated from Serb control. ICNL has been talking to government officials and others about creating similar protections for Kosovar civil society. A primary problem is that many Kosovar NGOs are operating informally because otherwise they would have to seek registration from the Serb Ministry of Interior or the Yugoslav Ministry of Justice.

ICNL is mobilizing its partners in Albania and other neighboring countries to provide technical assistance on subsequent initiatives. In addition, Dragan Golubovic (a lawyer from Novi Sad serving as the Senior Legal Advisor in ICNL-Budapest) is examining legal dimensions of this issue under Yugoslav law.