How can an association apply for its non-profit status?
December 18, 2022 | 50,00 EUR | answered by Günther Schmidt
Dear tax consultant,
I am Erika Huber and a board member of a non-profit organization. We are dedicated to social projects and would like to apply for tax-exempt status in order to take advantage of tax benefits and issue donation receipts.
In the past, we have found that some donors only want to donate if they can receive a donation receipt. Unfortunately, we have not been able to issue donation receipts so far, as our organization is not yet recognized as tax-exempt.
We are unsure of how to apply for tax-exempt status and what requirements we need to meet to obtain recognition. We want to ensure that we follow all necessary steps correctly to receive tax-exempt status and continue our engagement in the long term.
Could you please explain to us how to apply for tax-exempt status and what documents we need for it? Are there specific criteria that our organization must meet to be recognized as tax-exempt? We would greatly appreciate your support and guidance in this matter.
Thank you in advance.
Sincerely,
Erika Huber
Dear Mrs. Huber,
Thank you for your inquiry regarding the application for tax-exempt status for your association. I would be happy to assist you in understanding the necessary steps and compiling the required documents.
To be recognized as a charitable organization, certain requirements must be met. Firstly, the purpose of the association must be exclusively and directly charitable. This means that the association must work for the common good without pursuing self-serving interests. In your case, where you are involved in social projects, this requirement should already be met.
Furthermore, the association must adhere to certain formalities, such as the statute, which clearly and unambiguously defines the charitable purposes of the association. The statute should also contain provisions regarding the use of funds to ensure that they are used exclusively for charitable purposes. Additionally, the members of the board must act on a voluntary basis and may not receive any compensation.
To apply for tax-exempt status, you must contact your local tax office. There you will receive the necessary forms that need to be filled out. In addition to the forms, you must submit a copy of the statute, a breakdown of the association's income and expenses, as well as a description of the past and planned activities of the association. It may also be necessary for you to obtain a certificate of charitable status from an umbrella organization.
It is important that you submit all required documents carefully and completely to increase the chances of being recognized as a charitable organization. If you are unsure whether your association meets all the criteria, you are welcome to schedule a consultation for further assistance.
I hope this information is helpful to you and I am available to answer any further questions.
Sincerely,
Günther Schmidt, Tax Advisor
