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Public Benefit Organizations

  Public Benefit Organizations

Following regulations of the public benefit and volunteer work Act of law of April 24, 2003 (Journal of Law no 96, item 873) and the introductory regulations Act of Law (Journal of Law no. 96, item 874),  non-governmental organizations and other entities operating in the area of public benefit, from January 1, 2004,  may apply for the public benefit status. There are certain benefits and obligations stemming from this status. The status is to be granted to the “elite” of the Third sector, providing services for the general public, and guaranteeing transparency of operations ever since the moment of registration. 

 

ENTITIES ENTITLED TO THE PUBLIC BENEFIT STATUS

In accordance to Article 3, item 1 of the public benefit and volunteer work Act of Law,  activities addressing the general public, conducted by NGOs in the area of public tasks defined in the Act, are considered as public benefit activity. Non-governmental organizations are, in accordance to Article 3, item 2, corporate and non-corporate entities not forming part of the public finance sector, formed against relevant provisions. Apart from NGOs, public benefit activity may be conducted by church legal entities and organizational units and local authority organizations unions. Entities involved into public benefit activities may apply for the public benefit status. Provisions do not apply to the following: political parties, trade unions and employers organizations, professional self-governing authorities, foundations, for whom the State Treasury or a local authority organizations are the sole founders and companies operating under legislation on physical culture and sports. NGOs and other entities operating in the area of public benefit work obtain the public benefit status once the appropriate entry is made to the National Court Register.

CONDITIONS OBLIGATORY FOR ORGANIZATIONS APPLYING FOR THE PUBLIC BENEFIT STATUS

According to Article 20 items 1 and 2 of the Act, the exclusive statutory activity of entities applying for the public benefit status must consist in performance of public tasks defined in the Article 4, to aid general society or a group of entities, provided that such group can be distinguished from the society for reasons of difficult living conditions or financial situation.

The organization should be able to prove its operations, which means that it has to function before it applies for the public benefit status and operate in the field of public benefit for some time. In order to prove its performance the organization may present e.g. an extract from appropriate register, a report on operations or a tax return. 

The statute of the organization must meet requirements defined in Article 20, items 6 and 7, i.e. the organization must have a statutory collegiate audit or supervision body, separate and independent from the management body; the statute or other internal document should prohibit making any donations for the benefit of its members or employees under preferential terms.

REGISTRATION

The abovementioned entities operating in the area  of public benefit work, which prove their conformity to the above requirements, shall gain the public benefit status as of the date of entry into the National Court Register. Application templates to be submitted to the register court  in order to obtain the status, had been defined in the decree of the Minister of Justice of October 17, 2003 (Journal of Law no 188, item 1846). 

The registration is free of charge, while the information on obtaining the status shall be announced in the Court and Economic Monitor, which involves an expense of 500 zloty.

 OBLIGATIONS STEMMING FROM THE PUBLIC NENFIT STATUS

Public benefit organizations have an obligation to draft and submit annual performance reports on activities. The annual report consists of narrative account and a financial statement.

The financial statement shall include information on expenses related to the statutory goals, business activities, administration, as well as on the number of employees, total amount of remuneration, value of assets and liabilities of the organization. 

The financial part of the annual report shall also include information on purchased properties, tasks commissioned by public administration units under the provisions of the public benefit and volunteer work Act of law and the public tenders Act of law.

The organization shall make its report public – e.g. by making it available in its headquarters or at the internet website.

The annual report shall be submitted  to the minister responsible for the social security issues.

Operations of public benefit organization, as to the proper form of such organization using benefits stemming from the public benefit and volunteer work Act of law, shall be supervised by the minister responsible for social security issues (currently being the Minister of Social Policy), while in case of organizations operating in the area of rescue and security services – minister responsible for internal issues (currently being the Minister of Administration and Internal Affairs).  

PRIVILAGES STEMMING FROM THE PUBLIC BENEFIT STATUS

1. Legal and fiscal privileges

In accordance with Article 24 of the public benefit and volunteer work Act of law, public benefit organizations are offered a number of legal and fiscal entitlements. One of the most important ones consists in eligibility for a waiver of the corporate income tax. The waiver concerns income allocated for the statutory goals – with exclusion of business activity. 

Moreover, public benefit organizations enjoy exemption from property tax – for premises used for conducting unpaid statutory public benefit activity.  

Applications and other official documents issued by public benefit organizations are free of stamp duty; they are also exempt from court fees and Civil Code procedural fees – in relation to public benefit activities engaged in by such organizations.  

2. The right to use a property owned by the State Treasury.

Public benefit organizations may gain the right to use property owned by the State Treasury or by local government  authorities with preferential terms applying. It means that the minister responsible for the state treasury issues may make a donation of properties owned by the State Treasury to a public benefit organization. In case that the donation is used in the way other than defined in appropriate agreement and in case that the organization loses the public benefit status – the donation shall be withdrawn. Moreover, the administrative unit may reduce the settled price for a public benefit organization – should the property be used for purposes related to public benefit activities. Public benefit organizations also take the precedent over other entities in the lease, rent and use of facilities in the disposal of public administration – if it is necessary for public benefit work they engage in.

It should be remembered, that the right of property usufruct shall expire and the lease or rent agreement shall terminate, should the organization lose its public benefit status.

3. 1%

The public benefit and volunteer work Act of law introduced an opportunity to donate 1% of the personal income tax to support public benefit organizations. 

The taxpayer may pay a calculated amount to the bank account of the NGO and show this in his/her tax statement. 

4. Other rights

In accordance to Article 189 of the Act of law on the obligation of protection of the Republic of Poland of November 21, 1967 (Journal of law, 2002, No 21, item 205, with amendments) conscripts shall be dispatched for the substitute military service in public benefit organizations, except for business activities engaged in by such organizations. 

Moreover, public radio and television facilities shall provide public benefit organizations with free of charge broadcasting time to inform the general public of their activities.

According to provisions of the Act of law on social employment of June 13, 2003 (Journal of law No 122, item 1143) public benefit organizations have a right to establish social integration centers.

When speaking about rights entitled to public benefit organizations it should be also kept in mind that they can, under the same conditions as other NGOs and institutions engaged in public benefit activities, take advantage of volunteer work and donations for public tasks commissioned by public administration authorities. 

It should be remembered, that the right of property usufruct shall expire and the lease or rent agreement shall terminate, should the organization lose its public benefit status.

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