The Codice del Terzo Settore (D.Lgs. 117/2017): A Complete Overview for APS

Introduction: The reform that transformed Italy's nonprofit world

Legislative Decree No. 117 of 3 July 2017 (commonly known as the Codice del Terzo Settore, Italy's "Third Sector Code") represents a milestone in the history of Italian legislation governing associations and nonprofit entities. Published in the Gazzetta Ufficiale (Italy's Official Gazette) on 2 August 2017 and phased in gradually, this piece of legislation revolutionized the landscape of Italy's third sector, replacing a fragmented body of earlier rules with an orderly, coherent, modern system.

For anyone running an Associazione di Promozione Sociale (APS), Italy's "social promotion association" — a specific type of nonprofit entity — understanding the structure and principles of this Code is essential. It isn't just a matter of bureaucratic obligations: it's a regulatory framework that defines what it means to operate in the third sector, which activities can be carried out, how to organize the entity, and which tax benefits are available.

In this first installment of our "Codice del Terzo Settore" series, we cover the complete overview: the legislative structure, the founding principles, the types of entities provided for, and the key points every APS needs to know to operate in compliance with the law.

The structure of D.Lgs. 117/2017: 104 articles organized into 12 titles

The Codice del Terzo Settore is organized logically and hierarchically, divided into 12 Titles for a total of 104 articles. This structure allows for orderly consultation and makes it easier to understand the different regulatory areas.

The 12 Titles of the Code

1. Title I - Principles and common provisions (Arts. 1-13): Defines third-sector entities, the non-profit principle, and activities of general interest.

2. Title II - Volunteers' rights and duties (Arts. 14-21): Regulates the relationship between volunteers and organizations, protections and responsibilities.

3. Title III - Organizzazioni di Volontariato / ODV ("volunteer organizations") (Arts. 32-45): Specific rules for ODV, requirements, registration, governance.

4. Title IV - Associazioni di Promozione Sociale / APS ("social promotion associations") (Arts. 46-58): The complete discipline governing APS, their distinctive features, and obligations.

5. Title V - Philanthropic entities (Arts. 59-71): Governs philanthropic entities, their purposes and governance.

6. Title VI - Social enterprises (Arts. 72-80): Regulates social enterprises, hybrids between commercial and social activity.

7. Title VII - Third-sector taxation (Arts. 81-104): Contains all the tax provisions, incentives, the flat-rate scheme, VAT, and personal income tax rules.

8. Title VIII - Associative networks (specific articles): Governance of networks among entities.

9. Title IX - Mutual aid societies: Governs the historic mutualistic societies.

10. Title X - Registro Unico Nazionale (RUNTS) ("National Single Register"): Rules on the national digital register.

11. Title XI - Oversight and control: The supervisory powers of public authorities.

12. Title XII - Transitional and final provisions: Rules for the transition from the old regimes (ONLUS) to the new entities.

What the Codice del Terzo Settore covers

The Code isn't a simple regulatory catalogue: it's a comprehensive reform that addresses:

- Definitions and types of entities (what an ETS is, which legal forms are recognized)
- Activities of general interest (Art. 5: the 26 categories of activity that qualify an entity as part of the third sector)
- Organizational obligations (bylaws, general meetings, governance, controls)
- Volunteers' rights (protections, liability, insurance)
- Taxation (corporate income tax/IRES, regional production tax/IRAP, VAT, flat-rate scheme, donations)
- Accounting and financial statements (accounting obligations, filing of documents, mission report)
- Access to benefits and incentives (tax deductions for donors, contribution relief)

The concept of Ente del Terzo Settore (ETS): founding principles

One of the most significant innovations of D.Lgs. 117/2017 is the unified definition of Ente del Terzo Settore (ETS) — "third-sector entity" — which brings together various types of organizations under a single basic set of rules, while still preserving specific features for each category.

What is an ETS: the legal criteria

Under Art. 4 of the Code, an Ente del Terzo Settore is an organization that:

1. Operates without a profit motive: it doesn't distribute profits to members, and reinvests everything into mission-related activities.
2. Carries out activities of general interest (Art. 5): it dedicates its main activity to one or more specific categories of social benefit.
3. Respects the principle of mutuality and solidarity: it favors relationships based on reciprocity and community support.
4. Subordinates the pursuit of economic interest to civic and solidarity-based goals: it does not operate for personal profit.
5. Is registered with the RUNTS (Registro Unico Nazionale del Terzo Settore, the National Single Register of Third-Sector Entities): now an essential condition for accessing benefits.

These criteria clearly distinguish third-sector entities from:
- Ordinary commercial businesses (which are profit-driven)
- Public bodies (which are run by public administrations)
- Informal associations (unregistered, with no legal status)

The types of ETS provided for by the Code

D.Lgs. 117/2017 recognizes 7 types of Ente del Terzo Settore:

| Type | Main characteristic | Code articles |
|-----------|--------------------------|------------|
| Organizzazioni di Volontariato (ODV) | Activity carried out predominantly by unpaid volunteers | Arts. 32-45 |
| Associazioni di Promozione Sociale (APS) | May employ paid staff, activity for members and/or third parties | Arts. 46-58 |
| Philanthropic entities | Assets dedicated to charitable purposes | Arts. 59-71 |
| Mutual aid societies | Traditional mutualistic societies (very rare today) | - |
| Social enterprises | Hybrid: pursue social goals also through commercial activity | Arts. 72-80 |
| Associative networks | Groupings of multiple entities for coordination | - |
| Other ETS | Entities that don't fall into the previous categories | - |

Each type has its own specific requirements, but all must comply with the Code's general principles.

Activities of general interest (Art. 5): the heart of the reform

Art. 5 of the Codice del Terzo Settore is the linchpin of the reform, because it defines what it means to operate in the third sector. A nonprofit entity can only be classified as an ETS if it carries out, as its main or exclusive purpose, one or more activities of general interest.

The 26 categories of activities of general interest

The Code lists 26 categories, identified by letters (a, b, c... through z):

1. Social assistance and social services: for elderly, disabled, and vulnerable people
2. Hospitality and housing: shelters, refuges, group homes
3. Education, instruction, and vocational training: schools, courses, workshops
4. Scientific research: of public and social interest
5. Environmental and landscape protection: conservation, sustainability
6. Healthcare: health and socio-health services
7. Culture, art, performing arts: exhibitions, music, theater
8. Sport: promoting sport as a social activity
9. Sustainable tourism: with educational and local-development purposes
10. Employment inclusion: integrating disadvantaged people into the workforce
11. Reception and integration of migrants: support for asylum seekers
12. Poverty relief: tackling economic hardship
13. Civil protection: protection in emergency situations
14. Peace and human rights: promoting peace and respect for rights
15. Local development: economic revitalization of disadvantaged areas
16. Solidarity economy and fair trade
17. Prevention and recovery from addiction
18. International cooperation and development
19. Institutional reform and advocacy: promoting democracy
20. Services for the elderly: specific social and care services
21. Services for young people and minors: protection, educational support
22. Services for people with disabilities
23. Civic education and awareness
24. Preservation of cultural heritage
25. Social-utility services: transport, food distribution, etc.
26. Other activities of general interest (catch-all category)

For an APS, it is essential to state which of these 26 categories constitutes its main activity when registering with the RUNTS and in its bylaws. This choice has significant tax, organizational, and administrative implications.

Instrumental activities and other activities

Alongside activities of general interest, the Code allows entities to carry out instrumental activities (functional to pursuing the mission) and other activities distinct from those of general interest, but only on condition that:

1. The bylaws explicitly allow it
2. Such activities remain secondary and instrumental relative to the main activity
3. The economic value generated by other activities does not exceed a significant percentage of total income

This flexibility allows, for example, an APS working in cultural education to also run a small book- or merchandise-selling activity, as long as this doesn't become its main activity.

The transition from the old rules: ONLUS, ODV, historic APS

When the Code came into force, many existing organizations held a different status. The transition process has been gradual and complex.

The historic ONLUS status (now superseded)

ONLUS (Organizzazioni Non Lucrative di Utilità Sociale — "nonprofit organizations of social utility"), introduced in 1997, were the main category of nonprofit entity eligible for tax benefits. With D.Lgs. 117/2017, the ONLUS regime was progressively phased out, culminating in its definitive expiry on 31 December 2024. Every former ONLUS had to convert into one of the ETS types (APS, ODV, philanthropic entity, etc.) in order to keep its tax benefits.

Administrative transition: the RUNTS

A crucial part of the reform was the establishment of the RUNTS (Registro Unico Nazionale del Terzo Settore, the National Single Register of Third-Sector Entities), a centralized digital register that has progressively replaced the old regional and provincial registers. Registration with the RUNTS has become mandatory for accessing tax benefits and for full legal recognition.

Every APS, ODV, philanthropic entity, etc. must apply for RUNTS registration through the dedicated portal (https://www.servizi.lavoro.gov.it/runts), filling in detailed questionnaires covering:
- Identifying information
- Type of entity and main activity
- Bylaws and governance
- Financial statements and reports

Once registered with the RUNTS, the entity becomes publicly visible and verifiable, which increases transparency and credibility.

Recent updates: D.Lgs. 186/2025

It's worth noting that the Codice del Terzo Settore hasn't remained static: it has undergone significant updates, including Legislative Decree No. 186 of 4 December 2025, which introduced important changes on tax matters (in particular, lowering the flat-rate scheme threshold from €130,000 to €85,000) along with other regulatory adjustments.

This ongoing evolution of the law reflects the need to keep the framework aligned with European directives and the changing needs of Italy's third sector. For this reason, it's essential for anyone running an APS to regularly update their knowledge of the law and stay informed about changes.

Obligations and benefits: the overall picture

Obligations for those registered as ETS

Registration with the RUNTS and operating as an Ente del Terzo Settore bring with them a set of obligations:

1. Annual financial statements and report (by specific deadlines)
2. Statutory books (minutes of general meetings, resolutions)
3. Mission report (description of activities carried out)
4. Annual RUNTS declaration (updating information)
5. Compliance with the non-profit limits (not distributing profits)
6. Bylaws consistent with the Code (containing specific required content)
7. Organizational transparency (public information on governance, financial statements, leadership)

Benefits and incentives

In exchange for these obligations, ETS enjoy significant benefits:

1. Tax benefits for the entity: reduced IRES, VAT exemption on activities of general interest, flat-rate scheme
2. Deductions for donors: up to 35% of donations, in-kind donations, etc.
3. Public funding: access to regional, national, and European grants
4. Legal recognition: greater credibility and trust
5. Administrative simplifications: simplified accounting for small entities
6. Regulatory protections: protection for volunteers, clear governance rules

Organizational structure and governance: what the Code requires

D.Lgs. 117/2017 doesn't mandate a single organizational form, but it establishes fundamental principles that every APS must respect in its bylaws:

Essential bodies

1. General assembly: the sovereign body where members/associates decide
2. Board of directors/management: the executive body
3. Auditor/board of auditors (for larger entities): internal oversight

Principles of democratic governance

The bylaws must provide for:
- Clear criteria for membership and expulsion
- Members' rights (vote, information, participation)
- Rules for general meetings and resolutions
- Grounds for ineligibility for directors (no conflicts of interest)
- Transparency on the compensation of executives and staff

The Code discourages oligarchic structures: every APS must demonstrate that decision-making power is distributed and that there are no privileged economic beneficiaries.

Conclusions: why the Codice del Terzo Settore matters for your APS

D.Lgs. 117/2017 represents a shift from a fragmented, inconsistent regime to a modern, coherent system. For anyone running an APS, this means:

- Regulatory clarity: knowing exactly which activities to carry out, how to organize, which obligations to meet
- Legal protection: legal recognition, defined liability, protections for volunteers
- Access to benefits: significant tax advantages, credibility with funders and partners
- Participation in the RUNTS: visibility and transparency as a defining feature of the Italian third sector
- European alignment: the Code brings Italy in line with European directives on the solidarity economy and the third sector

If your APS isn't yet fully compliant with the Codice del Terzo Settore (for instance, still transitioning from the old ONLUS regime, bylaws not updated, not registered with the RUNTS), it's urgent to get in order: the tax and organizational benefits are well worth the administrative effort.

Sources and further reading

- Gazzetta Ufficiale - D.Lgs. 117/2017 - Official text of the Codice del Terzo Settore (in Italian; this is the text that governs)
- Ministero del Lavoro - Codice Terzo Settore - Official PDF of D.Lgs. 117/2017
- RUNTS - Registro Unico Nazionale - Registration and management portal
- Cantiere Terzo Settore - Complete reform - Analysis organized by title
- Altalex - Codice del Terzo Settore - Updated legal database

Disclaimer

This article provides general information about the Codice del Terzo Settore, current as of May 2026. For questions specific to your APS, always consult an accountant or a lawyer specialized in nonprofit law, since the legislation continues to evolve and specific circumstances may require personalized assessment. Where this article translates or paraphrases the text of the law, the Italian original remains the only legally binding version.

Next in this series

In the next installment, we'll look in depth at the differences between APS, ODV and ETS: what specific requirements determine which legal form best suits your organization.

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