A non-profit association can have a non-profit purpose, conduct non-profit activities or both. Examples of non-profit associations are sports associations, trade unions and cultural associations. You may need to apply for an organization number and register the association with the Swedish Tax Agency.
1. Decide to start a non-profit association
To start a non-profit association, you must be a group of at least three people. You start by forming a temporary board and write a proposal for statutes. You in the group must decide on the statutes at the association's first member meeting, which is called a constituent meeting. At the meeting, the members elect a board and one or two auditors. After that, the association is formed.
Public benefit non-profit association
Public benefit activity means that the activity is something that society thinks is worth supporting. Examples of this can be charity, culture, sports, education or youth activities.
Public benefit non-profit associations are, unlike other non-profit associations, tax-exempt for partial income. The association must then fulfill the following four conditions to be of public benefit.
- The association shall have a non-profit purpose
- At least 90 percent of the association’s activities shall serve to satisfy the association’s non-profit purpose
- At least 80 percent of the association’s income shall be used to fulfil the association’s non-profit purpose
- The association shall be open to all who wish to become members
2. Apply for a company registration number
When the association is formed, you can apply for an organization number at the Swedish Tax Agency. There is no requirement for a non-profit association to have an organization number. However, the association must have an organization number if, for example, you are going to open a bank account, rent premises, apply for grants, pay salaries or fees, or carry out assignments for companies and municipalities.
3. Tax register the association
If the association runs a business or pays compensation, you may need to apply for F-tax or register the association for VAT or as an employer. The easiest way is to use the service here at verksamt.se.
Apply for F-tax
You can apply for approval for F-tax if the association has business activities. The information on surplus that you enter in the application is the basis for how much preliminary tax the association must pay per month.
Register the association for VAT
Those of you who run a non-profit association that has economic activities, for example producing and trading in goods and services, must add VAT to the price when you sell a good or service. You can also deduct the VAT you pay when you purchase goods and services for the business. An association that has a sale where the taxable base does not exceed SEK 80,000 during a tax year is covered by the VAT exemption. This means that you do not need to register the association for VAT.
VAT rules for non-profit associations
If the association is a non-profit non-profit association and does not have to pay tax on the business's income, you must never add VAT to the price or deduct VAT on purchases for the business. However, the association may have to pay VAT on the purchase of goods and services from abroad.
Register the association as an employer
You must register the association as an employer if you pay compensation for salary, fees or give benefits to a person or a company that is not approved for F-tax. You only need to register the association as an employer if the compensation exceeds SEK 1,000 per person per year. If the association pays out compensation under SEK 1,000, you must instead report it on a control statement from employers, etc. (KU10).
Special rules for remuneration to athletes
You do not have to pay employer contributions or deduct tax on compensation below half the price base amount (26 250 SEK for 2023) per athlete during the year. This applies to non-profit associations that primarily engage in sporting activities. The association must have a purpose that benefits the public, an open admission of members and an activity that contributes to supporting the association's purpose.
If the amount is half the price base amount or more per athlete during a year, you must, however, pay employer contributions and make tax deductions on the entire amount.
4. Register the association's name
If the association is to conduct business, you can choose to protect the association's name with the Swedish Companies Registration Office. A commercial non-profit association can protect its business name in the county in which it is registered. The association can also apply for name protection in several counties. It costs an extra fee per county.
5. Check if you need a permit
It is important to find out if the activity requires a permit or some other form of notification to the authorities, municipality or other organisations. Special requirements can be placed on those who will run the business, or on the premises that will be used in the business.
6. Check whether you need to report the beneficial owner
A beneficial owner is the person or persons who ultimately own or control a company or association. Most non-profit associations have more than three members and each member has one vote. Because you need to control more than 25 percent to be a beneficial owner, this usually means that there is no beneficial owner in a non-profit association.
More about non-profit associations
Remember to report a c/o address if the association's mail is to go to a private person, for example to a member of the association. If the person moves or leaves the board, you must change the address for the association. It is not enough for the private person to change their address.
Declaring taxes for the association
Ideella föreningar som har ett organisationsnummer ska lämna inkomstdeklaration 3.
Does a non-profit association have to keep accounts?
A non-profit association is required to keep records if it fulfills any of the following:
- The value of the association's assets exceeds SEK 1.5 million.
- The association conducts business activities.
- The association is the parent company of a group.
Even if the association does not meet the requirements, you may be liable for accounting if it is stated in the association's statutes that you must keep an accounting.
It is important to be able to show the association's finances to, for example, members, banks, suppliers, municipalities and other stakeholders, even if you are not required to keep records.