Last modified: 2016-03-04
The Act no. 563/1991 Coll., on Accounting presents the list of the selected entities. They are for example the contributory organizations, state organizational units, local government units etc. Based on the Income Tax Act, these selected entities must allocate their costs to different types of activities that are either the mission of a non-profit organization or economic activities. The system of cost allocation requires demanding administrative procedures An entity must allocate costs to different activities and within these activities to cost that are and are not subjected to the tax. Examples of common costs include electricity, rent, management of organizations, etc. An entity allocates common overhead costs appropriately by selected criteria, known as the allocation base. The paper discusses a possible formation of an allocation basis for costs common to all activities while noticing the appropriateness of using allocation bases with an impact on profit of non-profit organizations.