Organisations with ANBI status must allocate a sufficient proportion of their resources to the public good.
ANBI stands for ‘Algemeen Nut Beogende Instelling’ (Public Benefit Organisation). Such organisations enjoy unlimited exemptions from inheritance and gift tax. Furthermore, in principle, the donor may claim a tax deduction for donations made to ANBIs against their income tax liability.
Expenditure criterion
One of the conditions that an ANBI must meet is the so-called expenditure criterion (anti-hoarding requirement). This means that the ANBI must ensure that more than 90% of its expenditure is spent for the public good. In addition, the ANBI’s administrative costs must be in reasonable proportion to its expenditure on charitable causes. There is also a requirement that an ANBI’s assets must not exceed what is reasonably necessary for the continuity of its (planned) activities.
Public benefit investment
ANBIs are permitted to Public Utility Investments (impact investment) to do. In a decision The State Secretary for Finance has set out the conditions that must be met for such an investment. As is also the case under the ANBI regime, these conditions are not particularly specific.
- The primary objective is to directly achieve or promote one (or more) of the ANBI’s objectives of general benefit.
- The investment is not a business activity whose primary purpose is to generate a profit.
- The amount of the investment must be used almost entirely by the organisation in which the investment is made for activities relating to the purpose of the investing ANBI.
- A director of the ANBI, or a person associated with that director, is not involved in any way with the organisation in which the ANBI invests.
- The ANBI clearly records the public benefit investment in its financial records and also in its policy plan(s).
Duty to report
An ANBI that does not meet the conditions set out in the decree at the time the decree comes into force must report this to the Tax and Customs Administration within 6 months of the decree’s publication (the decree was published in the Government Gazette on 2 April 2024). If, at any time after 2 April 2024, an investment no longer meets the conditions, this must be reported to the Tax and Customs Administration as soon as possible.