How are donations to foreign charitable organizations treated for tax purposes?
February 13, 2023 | 40,00 EUR | answered by Dora Krause
Dear tax consultant for association taxation and non-profit status,
My name is Emma Voigt and I am a member of a non-profit organization that is dedicated to animal welfare. Lately, we have been receiving more donations from supporters who would also like to support foreign non-profit organizations. The question now arises as to how donations to foreign non-profit organizations are treated for tax purposes.
Our situation is that we are registered as an association in Germany and therefore must comply with the tax regulations in Germany. However, we have some donors who would like to support internationally active organizations. Currently, we are unsure about whether and how these donations are treated for tax purposes, and whether there could be tax implications for our association.
Our concern is that by donating to foreign non-profit organizations, we may experience tax disadvantages or complications. Therefore, we want to ensure that we comply with all tax regulations correctly and do not encounter any problems with the tax authorities.
Could you please explain to us how donations to foreign non-profit organizations are treated for tax purposes and whether there may be tax implications for our association? Are there any specific regulations or requirements that we need to follow to ensure that all donations are correctly recorded and treated?
Thank you in advance for your support and expert advice.
Sincerely,
Emma Voigt
Dear Mrs. Voigt,
Thank you for your inquiry regarding the tax treatment of donations to foreign charitable organizations. As a member of a nonprofit association dedicated to animal welfare, it is important to be familiar with the tax regulations in Germany to avoid any potential disadvantages or complications.
In general, donations to foreign charitable organizations may be tax deductible in Germany. However, there are certain conditions that must be met in order for the donations to be eligible for tax deduction. An important requirement is that the foreign organization must be recognized as charitable and serve a similar purpose to your association. Additionally, the foreign organization should be based in an EU or EEA country, or there should be a double taxation agreement with the respective country.
It is advisable to verify these conditions in advance to ensure that the donations are indeed tax deductible. Furthermore, it is recommended to keep detailed records of the donations to be well-prepared in case of any inquiries from tax authorities. This could be done, for example, through donation receipts or confirmations from the foreign organization.
It is important to note that the tax treatment of donations to foreign charitable organizations may vary on a case-by-case basis. Therefore, I recommend consulting with a tax advisor specializing in association taxation and charity in a personal meeting to discuss your specific situation.
In conclusion, it is essential to strictly adhere to the tax regulations to avoid any issues with tax authorities. I am happy to assist you with any further questions and support you in the correct tax treatment of donations to foreign charitable organizations.
Best regards,
Dora Krause
Tax Advisor for Association Taxation and Charity
