GREECE Law and Practice Contributed by: Fotodotis Malamas, Bernitsas Law
ties are not included in the calculation of gross income and are therefore not taken into consideration for the NPCLC’s taxable basis. The same rules apply with regard to income from activities pursued within the framework of non-governmental organisation (NGO) activities pursuant to Law 2731/1999. If an NPCLC sells donated goods, any revenues will be subject to income tax, since the tax authorities do not assess whether cash inflow is channelled to charitable activi - ties. A thorough review of the current cash inflow structure of a société anonyme is therefore recommended. Not-for-Profit Regulations Another form regulated by the Civil Code is the not- for-profit association ( somatio ), which is defined as a group pursuing non-profit activities made up of a minimum of 20 individuals or legal entities, and that has acquired a legal personality. A somatio is established following the issuance of a court decision, and the registration of its articles of association with the competent registry is kept by the court. Its provisional directors are included in the arti - cles of association and, unless they provide otherwise, new members may always join, subject to the terms and conditions set out therein. The general meeting is the supreme governing body of the somatio , and may decide on all issues relating to: • its operation; • the acceptance or exclusion of members; • the election, supervision and revocation of man - agement; • the approval of financial results; • amendments to the articles of association; • change of scope; and • dissolution. Unless the articles of association provide otherwise, management is exercised by a board, the members of which are elected by a general meeting of members. According to the general provisions of the Civil Code, a somatio is liable for any acts or omissions of the persons representing it, to the extent that such acts or omissions take place in the course of the duties assigned to its representatives and which give rise
to an obligation for compensation. The person held responsible is also jointly and severally liable with the somatio . Members are liable towards a somatio for the pay - ment of their contribution. A somatio is wound up in accordance with the relevant terms of its articles of association, and in any case if its number of members drops to less than ten. It may not distribute profits, dividends or liquidation proceeds to its members, and upon its dissolution any liquidation proceeds will be transferred to other institutions with a similar purpose, according to the provisions of its articles of associa - tion or a decision of the general meeting. If no such provision or decision exists, liquidation proceeds will be transferred to the State. According to the ITC, a somatio is subject to 22% income tax only in respect of income deriving from commercial activities and is exempt from tax on income arising from the pursuits that fulfil its scope of activities. Religious Legal Entity The third charitable form is the religious legal entity (RLE), which is defined as a union of at least 300 indi - viduals belonging to the same religious community (ie, a sufficient number of individuals who openly follow the dogmatic principles of a known religion, perma - nently residing in a specific geographical area with a view to exercising common worship and performing the duties required by their religion’s dogmatic princi - ples) and pursuing the systematic and organised exer - cise of worship and collective expression of religious beliefs of its members. It acquires legal personality upon registration with the Registry held at the Court of First Instance, and at least one of its members must be a minister, priest or pastor who is either a Greek or EU citizen or a non- Greek residing permanently in Greece. An RLE is established following the issuance of a court decision, the publication of its dogmatic prin - ciples and a summary of its articles of association or charter, and the registration of its articles of associa - tion or charter with the registry kept at the court and
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