Follow up on the recommendations of the European Parliament report (the Lagodinsky report) on introducing a European Statute of Association and minimum standards of civil society legislation, develop these further in consultation with civil society stakeholders and adopt the proposed regulation and directive
Integrate the CoE Convention on the recognition of civil society organisations into European law
Review tax regulations affecting civil society and develop Commission recommendations to improve convergence of Member State rules
Carry out ex-ante and ex-post assessments of the impact of relevant EU legislation (e.g. related to rule of law, financing) and its implementation on civil society in the Member States
The statutory regulation governing the establishment and operation of CSOs – associations and foundations in particular – is divergent across Member States usually for historical reasons. While the basic freedom of association is guaranteed across the various jurisdictions, the detailed regulation regarding e.g. the registration process, public benefit (PB) status, taxation, administrative and reporting obligations vary, as they fall under the Member States’ competences. In order to achieve convergence across the Union, and to enable CSOs to act more efficiently across borders without hindrances, minimum legal standards for the interpretation and implementation of the freedom assembly should be adopted. In this respect, the recently approved Parliament report with recommendations to the Commission on a statute for European crossborder associations and non-profit organisations (A9-0007/2022, rapporteur: Sergey Lagodinsky) is a very significant development. The Commission should speedily act on this motion by adopting the proposed directive on minimum standards.
In the single European market and in times of globalisation, civil society organisations also increasingly work on the cross-border, regional or international levels. In order to facilitate this transboundary civil society activity (or, alternatively relocation among countries), the Lagodinsky report, building on earlier similar efforts (e.g. COM(2012) 35 final - 2012/0022 (APP ) also includes a recommendation for a regulation on a European legal form for associations. This initiative should also be followed up, also considering introducing a similar legal form for foundations. Legislative work should also use inputs and be further developed in consultations with representatives of civil society networks and academic experts in order to avoid unintended and unnecessary bureaucratic hurdles in the creation and operation European civil society organisations.
In addition, measures should be introduced to enable the legal recognition of civil society organisations in Member States other than their own. One possible option for this is the better use of the European Convention on the Recognition of the Legal Personality of International Non-Governmental Organisations (Council of Europe ETS 124, 1986). To date, 8 Member States signed and ratified this treaty – the Commission should encourage others to follow suit, and consider integrating the convention’s provisions into European legislation as well.
Another important barrier for European/international activity is the divergence of taxation systems of CSOs especially as regards cross-border giving and funding. A series of cases at the European Court of Justice examined the tax treatment of public benefit entities and their donors (e.g. Hein Persche/Finanzamt Lüdenscheid ; C-25/10 Missionswerk Werner Heukelbach eV/Belgien ). In its judgements, the ECJ upheld the principle of non-discrimination, implying that public benefit organizations and their donors acting across borders within the EU are entitled to the same tax incentives as would apply in a wholly domestic scenario, where the foreign EU-based organization can be shown to be comparable to a domestic one. However, in practice, most Member States have not developed procedural rules or guidelines to implement this principle, and those who did employ diverging approaches. Therefore, as suggested by the Social Economy Action Plan the Commission should develop uniform guidelines for the tax authorities of the Member States on the application of this principle and on how to test the comparability of non-domestic public benefit entities to domestic ones.
Besides European legislation directly dealing with or regulating CSOs, many other pieces of EU law or their interpretation and (over)implementation by Member States can directly or indirectly negatively affect their operation – anti-money laundering rules being a case in point (see under point 3.). In order to prevent or avoid these unintended impacts, draft EU legislation with such potential impact should undergo an ex-ante assessment process from the civil society point of view. Similarly, the impacts of existing legislation should be regularly reviewed with inputs and contributions of the affected organisations, and based on these changes or recommendations introduced.
1 See also: https://we-are-europe.org/wp-content/uploads/2018/09/wae_eas_historyandlegal_100918.pdf
2 See also: https://www.philanthropyadvocacy.eu/wp-content/uploads/2021/02/2020_Cross-border-Philanthropy-Taxation.pdf