During the last decades, value added taxation (VAT) has become widely used. Introducing or widening VAT may have important consequences for third sector organisations. There is no consistent, widely-accepted theory regarding the treatment of non-governmental organisations (NGOs) under VAT. International comparisons are difficult to make. The general scope of VAT, what goods and especially what services are included in the tax base, may be more important to NGOs than the direct concessions granted them. To comprehend how VAT may affect NGOs, it is necessary to understand the general mechanism and some of the technical details of VAT, such as registration thresholds and accounting requirements. There is a tendency for the legislature to widen the tax base and make VAT as general as possible. Tax administrative considerations may acquire the character of absolute principles. When VAT is introduced or widened, it may be important for NGOs to demonstrate how their tax bill has been changed as a possible unintended side-effect due to the administrative need to make VAT as comprehensive as possible.

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