ICCF Congress 2016

1. ICCF Congress 2016 Report To Congress TAX / VAT Liability in France ICCF Congress 2016

2. Tax and VAT liability in France • Applicable document: BULLETIN OFFICIEL DES IMPÔTS DIRECTION GÉNÉRALE DES IMPÔTS 4 H-5-06 N° 208 du 18 DECEMBRE 2006 IS. TP. TVA. DISPOSITIONS DIVERSES. COLLECTIVITES AUTRES QUE LES SOCIETES. ORGANISMES SANS BUT LUCRATIF. (C.G.I., art. 206-1, 206-1 bis, 206-5, 1447) NOR : BUD F 06 10049 J ICCF Congress 2016

3. Tax and VAT liability in France • ICCF is a non-profit organisation according to the French law criteria. • There are four conditions to be considered as a non-profit organisation, which are fulfilled by ICCF: • the managing officers shall not have any direct or indirect financial interest in the benefit of the association • the managing officers shall not be paid for their duties (The reimbursement of legitimate expenses are not considered in this case) • the benefit shall not be distributed in any kind • the members of the association shall not be the recipient of the assets of the association, unless the recipients are also non profit organisation. ICCF Congress 2016

4. Tax and VAT liability in France • the members of the association shall not be the recipient of the assets of the association, unless the recipients are also non profit organisation. • Only the fourth criteria may be subject to some discussions in the very unlikely case of the dissolution of ICCF: who will receive the ICCF assets? • Nothing is indicated so far in the ICCF Statutes and this is may be questioned by the administration. However, the Statutes have been registered without question, so I am not concerned about this point. • It is also important to note that the amount of benefit is not a criterion that may affect the non-profit status. ICCF Congress 2016

5. Tax issue • A non-profit organisation can be subject to taxes • Non-profit organisations can be subject to taxes if they are directly competing with commercial companies working in the very same field of activities and offering the same services. • This is the case of correspondence chess (CC) played on an internet server and ICCF has to be considered under this criteria. ICCF Congress 2016

6. Tax issue • Tax base • If the association services are in the field of sports, education, culture or social activities, the services provided to the members are not subject to any kind of taxes. • This is why the ICCF statutes now clearly define in its article 6, what is included in the membership fees. ICCF Congress 2016

7. Tax issue • Article 6 of the ICCF Statutes • Members of ICCF contribute to the material life of the organization by paying a membership fee which is set annually by the Congress. This membership fee is comprised of a fixed part based on the number of players belonging to the member federation and a second part corresponding to the number and nature of the chess games played by the players belonging to each member federation. • The first part of the membership fee is calculated per 100 players belonging to the national federation, giving rise, for each portion thereof, to a contribution in an amount set by the Congress. • The second part of the membership fee is a contribution levied against a rate for each tournament organized by ICCF multiplied by the number of players from the member federations who participated in each of these tournaments. ICCF Congress 2016

8. Tax issue • For ICCF, the commercial revenues are limited to the Direct Entry fees and the bank interests and have to be considered as the basis for taxes. • However, there is a tax exoneration if the commercial revenues are below 60.000€ which currently the case for ICCF (in 2014 the DE entries was about xxxxx€+ bank interest xxxxxx €) • In conclusion, ICCF is not currently subject to taxes of the benefits in France. ICCF Congress 2016

9. VAT issue ICCF Congress 2015