IP 31/2014
ON THE PARLIAMENTARY DEBATE ON THE PROPOSAL OF THE LAW
ON FINANCIAL OPERATIONS AND ACCOUNTING OF NON-PROFIT ORGANIZATIONS:
Associations, social cooperatives and social enterprises support the introduction of the principles of good financial management and control, which are manifested through the purposeful, rational and transparent disposal of financial and non-financial assets of non-profit organizations. They also support the obligation to publicly publish financial reports through the Register of Non-Profit Organizations and the establishment of a framework for financial planning of non-profit organizations, as this contributes to the realization of the principles of publicity and transparency of non-profit organizations' operations.
However, it is necessary to change the problematic provision of the Draft Law on Financial Operations and Accounting of Non-Profit Organizations, which in Article 33 defines the obligation to establish a company or other form of association that is not non-profit for the purposes of carrying out economic activities, if the organization generates more than 230,000 kuna in revenue per year.
The aforementioned provision contains a number of problems:
1) the provision is not commensurate (proportional) with the aim and purpose that is to be achieved - prevention and exposure of those organizations that abuse non-profit legal status for their business needs;
2) non-profit organizations are limited in their choice of action strategy in achieving their legitimate and legal goals and non-profit mission;
3) potential barriers are being created for the development of social entrepreneurship, and thus for the successful use of the European Social Fund, which is contrary to national strategies for encouraging the development of civil society and the fight against poverty and social exclusion;
4) obligations are prescribed that are impossible to realize within the existing legislation - establishment of a new legal entity that is not non-profit by a non-profit social welfare institution, social cooperative, etc.;
5) calls into question the long-term self-sustainability of civil society organizations since it will have a negative impact on the stability of jobs in non-profit organizations, which is in conflict with the strategic financing programs of civil society organizations in the past ten years;
6) regulates matters that are already regulated in the Income Tax Act;
7) An arbitrary financial limit of 230,000 kn is set without analytical indicators and explanations.
Due to all of the above, it is proposed to delete Article 33 of the Draft Law and prescribe a new article that would be added to Title VI Financial Reporting or would form a new Title VII Economic Activities and Financial Reporting, with the following provisions:
1) non-profit organizations may carry out economic activities and for that purpose dispose of assets in accordance with the Law and the Statute/Rules of the cooperative;
2) economic activity within the meaning of this Act means the sale or exchange of goods and services on the market under market conditions for the purpose of generating surplus income;
3) a non-profit organization may not carry out economic activities for the purpose of gaining profit for its members or third parties;
4) if, in carrying out economic activities, a non-profit organization generates a surplus of income over expenses, it must, in accordance with the Statute and Financial Plan, be used exclusively for the achievement of the goals set out in the Statute;
5) a non-profit organization that carries out economic activities is obliged to submit an additional annual report on income and expenses generated from economic activities with a specification of the distribution of surplus income in accordance with the Statute and the annual Financial Plan of the non-profit organization.
This statement is co-signed by the following associations, social cooperatives and social enterprises:
1. ACT Group, Čakovec (Autonomous Center - ACT, Social Cooperative Humana Nova, ACT Printlab doo, ACT Konto doo, Center for Eco-Social Development - CEDRA Čakovec)
2. AKC Attack, Zagreb
3. Baby
4. Brod Ecological Society-BED
5. CEDRA Split
6. Center for Education, Counseling and Research
7. Center for Healthy Growing Up
8. Censorship Plus, Split
9. CESI - Center for Education, Counseling and Research
10. Center for Civic Initiatives Poreč
11. Cluster for eco-social innovations and development - CEDRA HR, Zagreb
12. Center for Peace Studies
13. CTK Rijeka
14. Dalmatian Solidarity Committee
15. DESA - Dubrovnik
16. Documenta - Center for Dealing with the Past
17. DOOR
18. Society of People with Cerebral and Infantile Palsy - CeDePe Zagreb
19. Eco Pan
20. Ecological Association "Krka" Knin
21. Fade In
22. Forum for Freedom of Education
23. GONG
24th Croatian Ship Modelers' Association, Rijeka
25. Croatian Association of the Blind, Zagreb
26th Croatian Debate Society
27. Legal Information Center
28. KA-MATRIX - Association for Social Development, Karlovac
29. Novi život Theatre for the Blind and Visually Impaired, Zagreb
30. Coordination of children's associations
31. Human Rights House
32. Cultural and artistic community "St. Jerome", Štrigova
33. Cultural and artistic society "Anka Ošpuh", Ludbreg
34. CURSIVE - Platform for issues of culture, media and society
35. LAG Međimurje Valleys and Hills
36. Lika Women's Cooperative
37. Peace group Oaza Beli Manastir
38. Modra nit doo, Osijek
39. Network of centers for educational policy
40. Croatian Youth Network
41. Network of Associations of Persons with Disabilities of Dalmatia
42. Multimedia association Lapiš, Opatija
43. Nave dumins - Modeling Institute, Rijeka
44. ODRAZ-Sustainable community development
45. Mountaineering Society Pliš, Clan
46. Civil Rights Project Sisak
47. Stork
48. Croatian Tenants' Association
49. Shine
50. Social Cooperative - Contus, Pula
51. Miva-art Social Cooperative, Belišće
52. NEOS Social Cooperative, Osijek
53. Social Cooperative Put, Rijeka
54. Relax Social Cooperative
55. Social Service Cooperative Martinov płašt, Zagreb
56. SPUK - Social policy and inclusion
57th Serbian Democratic Forum
58. Transparency International Croatia
59. Association "Petrože-Krušljevo Selo", Oroslavje
60. Artless Bembo Association, Zagreb
61. Association of Children and Youth with Developmental Disabilities "Zvono", Belišće
62. KVARK Association, Križevci
63. Međimurje Hands Association, Lopatinec
64. Association Mi, Split
65. Association of Paraplegics and Tetraplegics of Osijek-Baranja County
66. Prospero Association, Gračac
67. Slap Association, Osijek
68. Association of the Blind of Međimurje County
69. Association Free School of Istria, Pula
70. SQLAdria Association, Rijeka
71. Association for the fight against addiction "Ne-ovisnost", Osijek
72. Association for Quality Living Krug, Pula
73. Youth Association Alfa Albona, Labin
74. Association for Independent Media Culture
75. Association for Sustainable Development of Croatia, Koprivnica
76. Association for Nature, Environment and Sustainable Development Sunce
77. Association for the Promotion of Creativity Merlin, Pula
78. Self-Advocacy Association
79. Zora Association, Čakovec
80. Angels Association, Split
81. Association for Peace and Human Rights "Baranja", Bilje
82. Volunteer Center Zagreb
83rd Zagreb Pride
84. Green Action
85. Green Istria
86. Women's Room - Center for Sexual Rights
