Policymakers ready to move towards a Single Market for Public Good
At an event hosted by Civil Society Europe and Philea on 28 November, EU policymakers confirmed that they are ready to move towards a Single Market for public good. The discussion came at a particularly timely moment ahead of the EU elections, as remarked upon by Delphine Moralis, Philea, when opening the event, stating that “the sector is ready to kick off with Philea publishing its new European Philanthropy Manifesto calling for a Single Market for Philanthropy and Civil Society Europe and Social Platform coordinating a breakthrough campaign for a “Civil Society for the EU”[1].
There are numerous tax, legal and administrative cross-border barriers hampering civil society and philanthropic space, as was illustrated by Eduardo Cuoco, IFOAM Organics Europe[2] and Anne-Laure Paquot, Transnational Giving Europe[3]. Confronted with this series of real-life case studies, representatives from the European Commission and European Parliament highlighted different initiatives in the pipeline that aim to solve some of the existing problems:
The European Cross Border Association proposal
Referring to the Council recommendation for developing social economy framework conditions approved on 27 November, Anna Athanasopoulou, Head of Unit for Social Economy, European Commission, focused her intervention on the Commission Proposal for a Directive on European Cross Border Associations. The directive introduces an additional legal form of a European cross-border association (ECBA) in Member States’ national legal systems. Thanks to the single ECBA certificate, an ECBA will be recognised automatically and will be able to engage in activities in all Member States. The proposal also contains a non-discrimination clause to make sure that this legal form is not treated differently than already existing national associations.
MEP Sergey Lagodinsky, rapporteur for the ECBA directive proposal, highlighted that, while there are still some definitions to be agreed upon, including on political activities, taxation and financial treatment, the points on freedom of movement and the principle of non-discrimination, foreseen by the proposal, are already revolutionary. With the European Parliament seeking to define its position on the proposal before the European elections[4], Lagodinsky called on civil society to “mobilise in order to make possibly sceptical Member States understand that the legislation has no threats, but only opportunities”.
Council Recommendation calling to overcome barriers to cross-border philanthropy
The Council recommendation for developing social economy framework conditions includes the call to Member States to facilitate cross-border philanthropy and ensure a correct implementation of the non-discrimination principle in the area of taxation of cross-border philanthropic activities. Albert Raedler, European Commission, Directorate for Taxation, presented the Commission staff working documents (on Relevant taxation frameworks for social economy entities and Non-discriminatory taxation of charitable organisations and their donors) accompanying the Commission proposal for a Council Recommendation on developing social economy framework conditions. It will be important that civil society now continues to put pressure on national governments to act upon the Council Recommendation.
Reactions from the sector
“The proposed ECBA directive comes after long work for civil society to be better recognised at the European level. It can also serve as a benchmark for national legislation on the establishment and operations of non-profit organisations” commented Carlotta Besozzi, Civil Society Europe. Hanna Surmatz, Philea, and Isabel Penalosa, Asociación Española de Fundaciones, also welcomed the directive, which “could also inspire the next steps needed for foundations to operate freely across borders”. Both noted that taxation issues are not covered by the ECBA proposal and it will hence be important to make sure Member States answer to the call to action on cross-border philanthropy made by Albert Raedler. “In light of the upcoming European elections and beyond, we call on EU policymakers to approve the ECBA Proposal and on Member States to follow up on the Council Recommendation as soon as possible, and to further their efforts to create a truly level playing field for public good”, Hanna Surmatz concluded. Brikena Xhomaqi, Lifelong Learning Platform, also welcomed the ECBA directive proposal, while also stressing the “need to ensure that the ECBA directive does not discriminate between EU and non-EU member states, for instance on the integration of the Western Balkans, which are more integrated in European associations but are still not in the EU”.
In her closing remarks, Gabriella Civico, Civil Society Europe, stated that this proposal will be of important benefit for people in Europe. “We’ve been talking about this since the 90s and we’re so close now. There is so much more civil society could do with the right tools”.
[1] The Civil Society for EU campaign is endorsed by a broad and diverse coalition of civil society and philanthropy organisations at European and national levels, including Philea.
[2] IFOAM was originally set up and registered in Sweden, without any economic activity there. From 2022 it opened ab ranch in Brussels with an office and employed staff. Due to the legal registration in Sweden but the economic activities in Belgium, several challenges arose, including the impossibility to provide the employed staff with a pension scheme. Therefore, the process to move the seat from Sweden to Belgium began, but it proved bureaucratically very difficult and, for this reason, has still not been completed.
[3] The cases presented by Anne-Laure Paquot on tax barriers, barriers in accessing banking services and transfer of foundations’ seats and cross border merger of foundations are part of a collection of case studies on Cross-Border Philanthropy which will be published jointly by TGE and Philea in January 2024.
[4] Once the Parliament defines its position on a Commission legislative proposal, it can enter interinstitutional negotiations for the adoption of the final legislative act.
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