
Doreen Weiß
Tax legislation for foundation law and the charity law is confusing and quite complicated ...
Provisions for taxation of foundations and other non-profit organisations are found in numerous tax laws; this makes it difficult to consistently comply with all requirements. The authoritative provisions result from the tax code (e.g. for tax-privileged institutions, mainly from charity law), but also from inheritance and gift tax law, income tax law (e.g. tax accounting law as regulated there and – for tax-privileged institutions – donations law), the real property tax law, trade tax law, corporate income tax law and VAT law. In certain situations, provisions pursuant to other tax laws may also apply –
for example, pursuant to real estate transfer tax law or tax conversion law.
... and frequently ambiguous
At the time of creating a foundation, the primary objective is to draft statutes that reflect the donor’s will, while at the same time choosing legally permissible wording. Following this, in daily business, permanent attention must be paid to complying with the requirements of tax law. However, these requirements are often tempered or even overridden by statutory exceptions or those granted by tax authorities, which can make consistent compliance with tax rules significantly more difficult. At the end of the day, the bodies of a foundation (particularly the board) are permanently in the rather difficult position of having to consistently comply with provisions that are ambiguous in many cases.
For example, to establish a tax-privileged foundation or civil society (with legal capacity or dependent) without jeopardising the status as a charity in daily practice, it is necessary:
Here, it is particularly important to
Our Industry Expertise Centre for Foundations and Non-Profit Organisations offers consultancy and support
Our specialists and our interdisciplinary team, consisting of auditors, tax consultants, lawyers and business consultants, have extensive experience in all matters relating to foundations with legal capacity and dependent foundations, and other non-profit organisations. We advise you professionally and support you in any necessary coordination with the tax authorities. In close consultation with you, we explore your options and develop appropriate solutions tailored to your individual requirements.