A brief review of the current regulations governingthe life of cooperatives in various countries around the world clearly highlights their weight in different societies, more or less advanced, andalso the influence of the current regulations ontheirdegree of development in any of these contexts.
Co-operatives have already been in Greek legal life for 106 years, since the first legal instrument on co-operatives was promulgated in 1915. Special attention is paid to the case of agricultural co-operatives, since it is themost familiar and “regulated” co-operative form. Moreover, the legislative regime concerning the tax treatment of agricultural co-operatives is particularly interesting, since its study provides us with valuable insight as to the general attitude of theGreek State and its legislature towards co-operative organization and operation with a special emphasis on the agricultural sector. Weattempt to gather and list all of the current issues specifically as to the taxation system of agricultural co-operatives inGreece, while presenting the historical background of co-operative legislation since 2000. There is a clarifying approach of the concepts of “surplus” and “profit” for agricultural co-operatives, an analysis of the current tax regime (income tax, VAT,etc.), its compliance with the EU competition and state aids provisions and a comparison between the taxation treatments of co-operatives with other capital based legal entities. Despite the fact that co-operative tax legislation is fragmented in severallaws, which were themselves repeatedly amended, modified, repealed or re-enacted, at the end of the day the reader shall have an overall view of the issue
Nigerian co-operatives are enabled by both national and subnational legislation. Section 20 (1) and (2) Nigerian Co-operative Societies Act, (NCSA)CAP. N98, exempts societies from the payment of stamp duties chargeable under the Stamp Duties Act CAP. S8. Section 23 (1) (b)of theCompanies Income Tax Act, CAP. C21and Section 26 (1) (c)of the Capital Gains Act, CAP. C1exempts societies from taxation of profits and gains. Current statistics show that co-operatives are more likely to possess characteristics of community organizations than commercial enterprises, with the consequence that their potential is sub-optimally utilized. There is a need for an appraisal of the specified circumstances in conjunction with some elements of their enabling legislation. The exemption from taxation is identified as a drawback in the implementation of the sustainable development agenda. This points to the need to integrate elements of company law into co-operative legislation to remedy the identified deficiencies.
This Article comprehensively analyzes the history of cooperative legislation and tax policies for cooperatives in Korea, including the current legal situationcaused by legislators’ misconceptions. Korean tax law divides cooperatives into two categories: non-profit corporations which are entitled to tax benefits and for-profit corporations which are not. Due to this dichotomy, general cooperatives, which account for the largest number of Korean cooperatives, fall into the latter category and are not entitled to any related tax benefits. This problem results in the double taxation on the surplus of general cooperatives. The Article regards this double taxation asa core problem for cooperative legislation and suggests legal measures to solve thisproblem systematically. The tax laws applied to cooperatives are complexly connected to cooperative laws, which is why they constantly affect one another. Therefore, thisArticle presents not only a proposal for a tax law amendment but also a reform of the legal framework of cooperatives, based on the analysis of the interconnection between them. To overcome double taxation of the cooperative’s surplus, this Article proposes a series of possible changes to the tax law, based on the recognition that the cooperative’s income ultimately belongs to its members. As a prerequisite for this revision, the Article demonstrates that it is essential to systematize the legal rules governing patronage dividends and to clarify the legal concept of “use” of cooperatives.
This paper will present thematic summaries of two recent judgements of the Supreme Court of India, and one judgement of the Madras High Court at Chennai, which concern cooperatives and the law on taxation in India. The judgements have been selected based significance the courts have accorded to the character of cooperative societies and organizations promoting them, as can be said to have been recognizedwithin international public-policy2applicable to cooperatives and intended to safeguard the unique identity of the cooperative enterprise form, which comprises of cooperative values and principles, and the basis for a definition for its legal form
The main reference of the Social Economy (SE) is the cooperative enterprise. In the Basque Country (BC), cooperatives have always represented a significant percentage of SE entities. In addition, the BCis among the highest-ranked territories in the world in terms of industrial entrepreneurial development in SE. Traditionally, Basque cooperatives have been concerned with meeting the needs of their members and with their active participation, taking into account the community around them. The values and principles governing these companies have been the economic driving force of the BC evenin times of economic crisis. These values and principles arekey instruments for working together to achieve the purposes of several Sustainable Development Goals (SDGs). Proof of this are the cooperative principles that, for more than half a century haveguided Mondragon Corporation Cooperative (MCC), a world benchmark of the Basque Cooperative Movement (BCM). This research aims to analyse the features of the BCM and its impact on the sustainable socio-economic development in the BC from the perspective of the 2030 UN Agenda for Sustainable Development (UN2030 Agenda).
In this paper, we consider the tax treatment of cooperativesin Belgium. To this end, we analyse the connections between tax and non-tax law,an analysis that is essential for understanding the current tax system (de lege lataperspective). In view of these connections, we highlight issues that should imperatively be addressed in the context of a reform of this tax system (de lege ferendaperspective).
Under Italian law, social cooperatives governed by Law no. 381 of 8 November 1991 benefit fromparticularly advantageous fiscal rules, which have been specifically conceived in accordance with that provision’s “mutualistic” purpose. The reformof the third sector also introduced rules on social cooperatives. Specifically, such entities are classified as social enterprises ope legis and are also referred to as third sector entities. However, it is not clear whether that classification will have any consequences for the tax regime applicable to them.The aim of this paper is first and foremost to verify whether any aspects of the legislation on social cooperatives, including provisions on tax, have been affected by the reform mentioned above, andif so which ones. Secondly it will also seek to establish whether the tax regime applicable to social cooperatives is consistent with the role performed by them within the third sector.
Thepromulgation of the Constitutionof the Republic of Cuba of 2019 supposed the general recognition of the cooperative, overcoming the past distinctions between its differentforms and laying down some guidelines for the determination of its legal nature inthesocioeconomic system of the country. At the level of ordinary development laws, including legal provisions on tax matters, a full reflection of this transformation has not yet been achieved. Consequently, the objective assumed in this work seeks to argue the premises that should guide the unification of the tax regime of Cuban cooperatives, in accordance with the role constitutionally assigned to them and their identity.
The “monotributo”, implemented in 1998, with the creation of the “Simplified Regime for Small Taxpayers” by National Law 24977, is the main tax option that the Argentine tax system offers to the members of worker cooperatives. Designed with a predominantlyfiscal purpose, the regime has undergone significant transformations over the years.In this paper we try to characterize, from a legal perspective, the “monotributo” regimein the Argentine legal system, describing the main changes that it has experienced since its implementation and addressing the underlying reasons for them.
This text analyzes the legal figure of the Cooperative Act based on theLatin Americandoctrine countries, demonstrating that this act is the central element of cooperative societies. From the understanding of the meaning of the Cooperative Act, it is possible to think of a model of taxation of cooperative societies, which must be carried out from the Cooperative Act. The methodology to be used is the bibliographic review of the works on cooperative law and the legislation of the countries.
Cooperatives in the USA (US) contribute in important ways to many sectors of society not only from a financial point of view but also, above all, from a non-financial one.Because cooperatives do not act like normal corporations, in many countries they aresubject to different tax laws, which should not be considered a handout but an understanding of their differences and fair compensation for their contribution to society.In the US, the taxation of cooperatives constitutes a verypeculiar regime with great differences from that of many other countries. The system, however, is not that different compared to other US entities, as in many instances the fact that an entity is a cooperative makes no difference for taxation.Therefore, the US system can be considered peculiar in the sense that both its taxation and, above all, its substantive regime are very different from the pattern followed by the vast majority of systems adopted for cooperatives around the world.Thus, the tax treatment of cooperatives in theUS can be regarded as an unusual one with certain peculiarities that originate from the tax clauses in the Internal Revenue Code and judicial doctrine. This happens because how a business is taxed at the federal level in the United States ispartly dependent on how it is organized. This is not an easy topic to study but a worthwhile one.First, because unlike in most legislations where the cooperative form is legally recognized, in the US it is not. What counts when considering anentity a cooperative is not the fact that it has been constituted or registered as such, but that the entity acts on a cooperative basis. Thus, depending on the possible forms that the entity acting on a cooperative basis takes, there are different choices of taxation. This means that there is no single special regime for all cooperatives but several ones, as different tax provisions may apply depending on the legal and tax form chosen. These include both general provisions for those entities and, sometimes, particular ones for acting on a cooperative basis.Second, the regime is complex because different legal provisions apply tocooperatives, which derive from the type of cooperative they are (as regards their social object). For example, tax measures foragricultural cooperativesdo not apply to worker cooperatives or electricity ones. Some of the measures in thissystem date back to the first half of the twentieth century, so the protection of certain activities that appeared reasonable back then may no longer be sotoday;Third,because there are different levels of taxation due to the fact that the US is a multi-level system. There is a federal regime for each of the different legal forms a cooperative may take. Furthermore, there are 47 States and the Districtof Columbia with their state tax regimes. There are also many more local ones, as several municipalitiesimpose corporate income tax.Fourth, certain provisions are only applicable depending on each cooperative’s bylaws, so these need to be acknowledged in advance.Fifth, the regime is made more complex because the different tax measures passed in the Tax Cuts and Jobs Act of 2017 and other measures recently adopted as COVID-19 relief may also apply to cooperatives.Fifth, because there is nocomprehensiveandsubstantive regulatory framework that deals with cooperatives, some of these entities are also regulated by the judicial interpretation of sections 1381–1388 in Subchapter T of the Internal Revenue Code.In summary, the US has different tax measures both in general andspecifically concerning cooperatives that make understanding taxation hard not only for scholars but also especially for cooperatives.This paper has two aims: on one hand,to provide an overview of this very peculiar system froma tax law perspective, concentrating only on cooperatives’ Income Tax. It should be added that many other typesof taxes apply to cooperatives that are not taken into account here, such as Property tax (real estate and personal), Payroll tax or Sales tax (States and local), and License and Excise taxes. There may also be employment taxes such as Social Security andMedicare taxes and Income Tax Withholding and Federal unemployment tax not taken into account for this paper with the purpose of simplification.On theother hand, the paper seeks to delve into the regulation of cooperatives, analyzing their low resiliencedue to lack of proper regulations and the frequent inadequacy of their measures, and suggest a different approach.
The cooperative society is shownto be a corporate formula inspired by different operating principles from those governing the conventional corporation.Based on this special nature that the cooperative has, the paper goes on to analyse its tax treatment,trying to find the answer to two questions.
In this paper we address the issue of taxation of cooperatives’ income. Cooperatives traditionallyreceive a specific tax treatment distinct from that given to companies. In general terms, thatspecific cooperative tax regime is apparently more favorable when compared to the one applied to companies. A tradition of granting cooperatives a favorable taxrelief-based tax regime is widely extended, being noticeable inall Western European Countriesandin the Northern American countries (USA and Canada). This paper seeks to lay down some conceptual basis on which the issue ought to beanalyzed, with aspecial emphasis on the definition of what is to be treated as cooperative income for tax purposes and the rationale for afavorable cooperative tax regime.
Cooperatives are today a very important economic sector in the EU, especially in their small and medium-sized version, in whose business fabricthey are heavilyinvolved and account fora significant proportion of employment in Europe. However, European cooperative law expressly excludes taxation from its statute, despite the fact that tax policy is a basic pillar of European integration.On the other hand, the national laws of many Member States have established specific tax regimes for co-operatives in order tocompensate for the inferior position in which they find themselves compared to capital companies. For years, thecooperative sector hasalso been calling for decisive intervention by the EU in support of these tax regimes,which have been continually challenged under State aid rules, because, in the dichotomous conception of forms of enterprise that prevails in EU law, cooperatives are excluded from the group of non-profit companies and are included among the rest of the capitalist companies.This work will analyze the state of the art of the contribution of European law to the construction of social cooperativism, emphasizing the taxationof cooperative societies and the role thatthe concept of "limited profitability”" canplay in this contribution.
TheJapanese co-operativelegislationis characterized by the separatelawsthat are specializing to regulate the particular categories of co-operatives andenacted in line with the industrial policies,and the strong government’s control on incorporation and business activities.The Industrial Co-operativeAct of 1900 was a uniform law following the German model and provided for the legal frameworkofcredit, supply, marketing and production1co-operatives.After the Second World War, the allied force introduced the radical land reform as a part ofeconomic democratization programsand helped to enact the Agricultural Co-operative Actin 1947 to cement the effects of reform through organizing farmers in agriculturalco-operatives. Then, the other co-operative lawswere enacted in line with industrial policies (fishery, forestry, banking, SMEsetc.) during 1948-1978. The exception was the Consumer Co-operativeAct of 1948 that placedserious impediments to co-operative activities including the complete prohibition of non-member business, the limitation of operating areas within a prefecture and the lack of credit business.As a result, there are more than 10 co-operative laws inJapanthat enable governmentstomake the strongcontrolover co-operative activitiesfor matters related to organization law as well as business laws. Such legal-administrative system based on laws and regulating ministries has resulted in the emergence of different organizational culture and politicalorientation of co-operativeswhile it contributed to the creation offragmented political economy dominated by the iron triangle of ministries, legislature and trade associations (Masahiko Aoki’s compartmentalized pluralism). It has been very convenient to ministries but might resulted in the lack ofidentityasa co-operative sector. After nearly 30 years efforts, the Workers Co-operative Act (WCA) passed the Diet on December 4th, 2020.WCA has some unique features compared to the existing laws and may give impacts to the existing co-operativelaws.This paper describes the brief history leading to the enactment ofWCA, explains the outline of WCA, discusses the potential impact to the existing co-operative lawsand concludes with some suggestions to make full use of WCA to operationalize workers co-operatives andenergize co-operative movement as a whole.
At the end of 2021, 10 years hadpassed since the enactment of Law 14/2011 on Andalusian Cooperatives (LACS). In the Spanish legislative context regarding cooperatives, this law represented a step forward in making the economicandfinancial framework of this type of entity more flexible. It is for this reason that we have found it interesting for researchers on cooperative company law from other countries to explore some of the most novel and striking features of this law, which, however, has not been without criticism
