The free movement of capital under Article 63 of the Treaty on the Functioning of the European Union is not violated if the tax treatment of a donation to a foundation based in the Swiss Confederation is subject to national requirements that apply in the Member State of the donor. According to the Supreme Tax Court, the national legislature is not obliged to recognize the charitable status under foreign law.
In most recent decision, the Supreme Tax Court held that there are no special circumstances that would allow for a retroactive determination of a carryover of donations in the year the donation was made if the correct application was not filed. However, without a separate determination, it is no longer possible to utilize the carryover in the following nine tax assessment years.
Donations and membership fees to recognized political parties will get more tax breaks in the future. Anyone who donates 3,300 euros can reduce their taxes by 1,650 euros a year—regardless of their personal tax rate, explains an executive director of the Federal Payroll Tax Support Association (Lohnsteuerhilfeverein) in Berlin.
Membership fees paid to a charitable organization that promotes cultural activities which mainly serve the furtherance of recreational and leisure activities are not deductible as special personal expenses for income tax purposes.
A non-profit association that entitles its sponsor to market the sponsorship measure as part of its advertising while at the same time indicating the association's promotion on its products is a service in return for the sponsorship funds received and as such fully deductible as business expense and not treated as donations. This was decided by the Hamburg Tax Court.
Donations to a foundation with legal capacity established by a federal state are not exempt from gift tax if, according to the purposes specified in the statutes of the foundation, the donations do not exclusively serve the purposes of the federal state and are not exclusively used for tax-privileged purposes. This is the conclusion reached by the Supreme Tax Court in a recently published decision.
In a recently published decision, the Supreme Tax Court clarified that foundations with legal capacity are not subject to trade tax per se. The decisive factor is whether economic business operations within the meaning of the Trade Tax Act are carried out.
The Berlin-Brandenburg Tax Court decided that maintaining an internet blog is an independent journalistic activity, and that the blogger’s earnings from this activity are taxable as income from self-employment under Section 18 of the Income Tax Act. The case is currently pending before the Supreme Tax Court.
According to a decision of the Supreme Tax Court, the mere fact that a foundation returns the amount it previously received from the donor to the latter within a short period of time as an interest-bearing loan and uses the interest income earned to promote its tax-privileged statutory purposes is not in itself a reason to deny the tax-deductibility of the contribution as donation.
The Federal Ministry of Finance published a circular on 15 January 2018 on crowdfunding and the conditions for its deduction as a charitable donation. The circular defines various types of crowdfunding and makes a distinction between classic crowdfunding, donation-based crowdfunding and debt-based crowdfunding (also referred to as peer-to peer lending or crowdlending).
The principle of altruism (selflessness) in the context of a non-profit organization does not only preclude economic benefits for members in their professional sphere. Economic benefits in the private sphere are also detrimental to a charitable status, the Supreme Tax Court said in a most recently published decision.
The Council of the European Union adopted an amendment to the VAT directive introducing a temporary VAT exemption on importations and on certain supplies in response to the COVID-19 pandemic. The ‘buy and donate’ directive will make it easier for the Commission and EU agencies to buy goods and services to distribute them free of charge to member states in the context of the ongoing public health crisis.
The Supreme Tax Court has held that donations to charities in other EEA countries must be supported by receipts and other documents. These documents need not necessarily be completely in conformity with the German forms, though they should demonstrate the substance.
The finance ministry has called on tax offices to follow the ECJ Persche case on donations to EU charities, provided the taxpayer shows that the charity would have qualified as such in Germany.
The finance ministry has issued a decree on extended deduction provisions for donations, sponsoring and other support given to the victims of the natural and nuclear disasters in Japan.
In coordination with the Supreme Tax Authorities of the federal states ("Länder"), the Federal Ministry of Finance published further tax measures to assist those affected by the Corona crisis in its circular dated 9 April 2020.
On Thursday, 26 June 2025, the Bundestag adopted the draft bill for the “Act for an Immediate Tax Investment Programme to Strengthen Germany as a Business Location” as proposed by the coalition parties (21/323).
In its judgment of 9 April 2026 – VI R 1/24, the Supreme Tax Court ruled that, under the Agreement for the Avoidance of Double Taxation concluded between the Republic of Cyprus and the Federal Republic of Germany (Cyprus DTA 2011), Germany had, as the state of residence, the right to tax the employment income of a German resident employee, who was working on board a vessel engaged in domestic maritime transport. Furthermore, it clarified that a ‘vessel engaged in inland waterway transport’ within the meaning of the Cyprus DTA 2011 is only one that operates exclusively on inland waterways situated within the mainland.
On 10 September 2025, the Federal Cabinet approved a draft bill to promote private investment and the financial centre (Location Promotion Bill). The draft law aims to provide a stronger impetus for private investment. To this end, the framework conditions for private investment should improve, particularly with regard to infrastructure, renewable energies and venture capital. Companies in the financial market sector will be relieved of unnecessary bureaucracy with the elimination of unnecessary auditing, reporting and disclosure requirements.
