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.
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 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 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 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.
The Supreme Tax Court has held that a donation to a charity registered in another EU/EEA member state is only deductible if its statutes and actual management conform to all the German requirements.
The finance ministry has added to its previous decree removing some of the formality from the required documentation of donations for the benefit of natural disaster victims in Japan.
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.
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.
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.
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.
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.
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.
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 finance ministry has issued a decree easing the formalities to be followed by those wishing to contribute to the support for the victims of the recent Elbe and Danube flooding.
If a gift is subject to inheritance tax under foreign law (here: Switzerland) because the donor dies within a short period of time after the donation, the tax is to be credited against the German gift tax pursuant to Section 21 Inheritance Tax and Gift Tax Act. With this decision, the Duesseldorf Tax Court upheld the claim of the plaintiff, who had residences both in the Canton of Lucerne and in Germany.
The finance ministry has amended its VAT Implementation Decree to the effect that a charity is deemed to perform a service if it grants a sponsor an explicit right to propagate the sponsorship in his own advertising.
