The Administration cantonale des impôts du canton de Vaud (ACI) has clarified its practice with regard to the remuneration of foundation board members in its directive published on January 29 entitled “Directives en matière d’indemnisation des membres d’organes d’entités exonérées d’impôts en raison de leur but de pure utilité publique (PUP)”. This information is particularly important, as compliance or non-compliance with the directive has a direct impact on whether or not tax-exempt PUP entities continue to be tax-exempt.
For executive members devoting less than 60 hours a year, a commitment of this duration is generally considered unexceptional.
In such cases, volunteer members may receive a maximum lump sum of CHF 300 per meeting (i.e. CHF 3,600 per year) instead of reimbursement of actual expenses. It is important to note that this practice must be governed by specific regulations, subject to ACI approval. These amounts are not taxable, and no salary certificate is required.
If executive members commit to more than 60 hours per year, detailed regulations are essential. This document must specify the terms and conditions for payment of allowances, include specifications, explain the method used to set allowances, describe the terms of payment, stipulate that allowances are declared as taxable income, and provide for the issue of a salary certificate.
These regulations, and any subsequent amendments, must be approved by the ACI. Finally, the directive sets a limit of CHF 10,000 for recurring mandates, such as bookkeeping, auditing and administrative tasks carried out by an executive member or a close relative.
It should be noted that, for obvious reasons of independence, mention of the auditor’s mandate is superfluous. Above the aforementioned amount, ACI must be consulted in advance. While the directive has the merit of clarifying ACI practice, its restrictive nature may make it even more difficult to recruit executive members.
This is all the more true given the responsibility that falls to them, especially as, unlike members of boards of directors, members of foundation boards are never, as a matter of principle, granted discharge for their management.
Swiss Certified Accountant, Director
This publication contains general information and is not a substitute for detailed research or expert advice. No liability can be accepted for its content. For specific questions, please contact the author.
