The world of the third sector, made up of Volunteer Organizations, Charitable Associations, Philanthropic Bodies, Foundations, Social Cooperatives, ONLUS or non-profit organizations is in turmoil for the reopening of the deadlines for the verification of the requisites necessary for transmigration and registration to RUNTS – Single National Third Sector Register. The terms for verifying the requirements of Cooperatives, Philanthropic Bodies, ONLUS ADV and APS Foundations, reopened from September 16, 2022. In the previous months, the starting terms for the verification of the requirements were set starting from February 22, 2022. They were then suspended from July 1 until September 15. The Ministry of Labor and Social Policies had ordered the suspension for the verification of the requirements of the APS and ODV Onlus at RUNTS, and on 22 August it clarified that:
- Voluntary Organizations (ODV) and Social Promotion Associations (APS) have 180 days to apply for registration to RUNTS;
- since the terms for preliminary investigation and requirements examination had been opened in February and interrupted on 1 July, for the year 2022 if at 30 June the application has not received any preliminary request and is still pending, the expiry of the 180 days or the deadlines for the acknowledgment interrupted on 1 July resume starting from 16 September 2022;
- any elements provided during the suspension from 1 July to 15 September remain valid;
- with decree 73/2022, the deadline by which ODV, APS and ONLUS registered in the previous registers can adopt the amendments to the statutes, to adapt to the requests contained in the Third Sector Code, has been set at 31 December 2022.
The Third Sector Code. How to become an ETS. RUNTS registration. FAQS
With the adoption of the Third Sector Code the entire sector of social organizations has been given regulation, from foundations to cooperatives and all forms of associations operating in the social sector. The Third Sector Code provides that:
- Third Sector Entities (ETS) are voluntary organizations, foundations, social promotion associations, philanthropic entities, charities, social enterprises such as cooperatives, associative networks, mutual aid societies, associations recognized or not, and other private entities other than companies set up for the non-profit pursuit of civic, solidarity and social utility purposes;
- Public administrations, political parties, political formations and associations, trade unions, professional associations and representatives of economic categories, employers’ associations, or any entities subject to management, coordination or control by the above cannot be considered ETS;
- Religious entities are considered ETS if they carry out activities of general interest described in art. 5 of the Third Sector Code and implement the rules of the Code in an internal regulation code.
The requirements to be recognized ETS and ETS by law
The following are considered ETS by law and automatically acquire the ETS qualification:
- Social Enterprises;
- Associative Networks;
- Philanthropic Bodies;
- Mutual Aid Societies;
- Volunteer Organizations;
- Social Promotion Associations.
Any social organization that is not automatically recognized as ETS, may request to be after amending their statute and articles of association with the inclusion required by Third Sector Code and when their exclusive or main activity is:
- of general interest;
- carried out on a non-profit basis;
- civic purpose;
- social utility.
For entities such as non-profit social cooperatives, foundations, non-profit associations, non-profit organizations, this is the time to identify, with the help of legal advice, the right form of association so as to be recognized as ETS and enroll in RUNTS. The detailed list of activities that can be carried out by ETS organizations is contained in art. 5 of the Third Sector Code.
Clarifications relating to the registration in the single national register of the third sector
RUNTS is the single register that includes all organizations operating in the third sector, including those that are already recognized as such, i.e. ONLUS ADV and APS, and is an essential requirement for accessing loans, tenders, funds, etc.
The register is:
- Held by the Ministry of Labor and Social Policies;
- Managed on a regional basis using exclusively IT methods. Registration at RUNTS is to be made electronically in the region where the organization is based, e.g. Lombardy, Lazio, Piedmont, Sicily, etc;
- Divided into 7 sections: voluntary organizations, social promotion associations, philanthropic bodies, social enterprises, associative networks, mutual aid societies and other ETS;
- Each entity requesting registration at RUNTS must proceed timely to the necessary changes to their statute and articles of association required for registration.
FAQ – Registration in the Single National Register of the Third Sector RUNTS
Here are some answers to the doubts concerning registration at RUNTS, the loss of the status of ONLUS, the management of the assets of the ONLUS and the new tax regime:
- ETS – Third Sector Entities – will be able to be enrolled in RUNTS starting from March 31 of each year;
- The deadline for registering the ETS at RUNTS is set each year by 31 March, when the new tax period starts;
- The non-profit ODV and APS organizations do not have to register. They are subject to transmigration from RUNTS registers, subject to verification of the requirements set by the Ministry of Labor and Social Policies. For 2022, the 180-day deadlines set for the completion of the file which started on February 22, 2022, are calculated taking into account the interruption that took place from July 1 to September 15 2022;
- The qualification of ETS is understood to be acquired from the beginning of the tax period of each year;
- Non-profit organizations registered at RUNTS or migrating to RUNTS lose their ONLUS qualification and are considered ETS social enterprises;
- If an ONLUS decides not to enroll in RUNTS and not to become a social enterprise, it is obliged to donate the assets acquired starting from the year in which it obtained registration in the Onlus registry. The assets owned by the organization before registration in the NPO’s registry are not subject to the obligation to devolve. In these cases, the ONLUS will have to prepare a document with which to describe the financial situation before assuming the status of ONLUS and after the loss of the status of ONLUS;
ETS assets management and taxation
The establishment of Italy Social Foundation and ETS assets management
The purpose of the Foundation is to manage bound assets to carry out the statutory activity of dissolved or extinguished ETSs. The assets of the ETS must always be used for the pursuit of civic, solidarity and social utility purposes provided for in the statute. Any ETS that carries out its business in the form of a commercial enterprise must be registered in the business register and can dispose of its assets pursuant to Articles 2447-bis and subsequent amendments of the civil code, and allocate it in whole or in part to a specific business. In the event of termination or dissolution of the ETS, the assets can be donated to other Third Sector Entities but to do so:
- the positive opinion of the RUNTS Office is required;
- the assets must not be disposed of by law for other purposes;
- the statutory provisions or the competent corporate body must be present.
In the absence of one of the requirements, the assets are donated to the Italy Social Foundation. Finally, the profits of the ETS cannot be distributed under any circumstances, not even indirectly.
ETS tax regime as stated by the Third Sector Code
For tax purposes, ETS are non-commercial entities when they exclusively or predominantly carry out the activities of general interest referred to in art. 5 of Decree no. 117/2017. An ETS is NON-commercial when it performs:
- activities of general interest free of charge;
- activities of general interest against payment, provided that the amount of the fee requested, including public contributions, does not exceed the actual direct and indirect costs;
- scientific research activity of particular social interest, reinvesting the profits entirely in research and in the free disclosure of the results.
In addition, the following do not produce ETS income:
- funds subject to occasional public collections such as celebrations, anniversaries, awareness campaigns;
- grants and loans from public administrations given for the performance of activities of general interest.
Transitional ETS tax regime
The entry into force of the new tax provisions is expected from the year following the acquisition of the Third Sector Entity. The perpetuation of the VAT exemption regime for some NGOs will have to be verified. However, ODV voluntary organizations and APS social promotion associations that achieved profits not exceeding € 65,000 will be entitled to apply the flat rate, as the State Budget Law has deferred the operation of the new promotional regime and related provisions to 1 January 2024.
Get in touch with Damiani & Damiani International Law Firm for legal advice on the best membership form to choose for enrollment in RUNTS and comply with the Third Sector Code