Basics of donation law and types of donation Donation law and definitions
Donations are contributions that are provided voluntarily and free of charge. These can be both monetary and non-monetary contributions, but not uses and services. It is important to note that membership fees, levies and similar payments to sports clubs are generally not recognised as donations, as they are directly due to the club by statute or membership resolution.
Donations in a tax context
In a tax context, we speak of donations if they are eligible for tax deduction in accordance with § 10b of the German Income Tax Act (EStG). Tax-privileged (‘non-profit’) corporations and public corporations, as well as political parties within the meaning of the Political Parties Act, are eligible to receive donations. In the following, we will limit ourselves to donations to tax-privileged (‘non-profit’) corporations.
Civil law perspective
From a civil law perspective, a donation is a gift in the sense of § 516 ff. of the German Civil Code (BGB), which means a gratuitous transfer. That is, the inflow of assets occurs without consideration.
Forms of donation
1. monetary donation: In the case of a monetary donation, the donor transfers a certain amount of money directly to the beneficiary sports club or non-profit organisation.
2. Donations in kind: In the case of a donation in kind, the donor provides the sports club or charitable organisation with a specific item, e.g. sports equipment or office supplies. It is important that ownership is transferred.
3. Used donations in kind: Here, the fair market value of the donated asset must be determined, based on factors such as original price, condition and useful life.
4. Donations in kind from business assets: In addition to the withdrawal value, the VAT incurred when the item was withdrawn can be deducted.
5. Donations in the form of services: Services provided for which no remuneration is given. However, the donation receipt is issued for a cash donation.
Donation in kind
A donation in kind is when a member of an association provides expenses to the sports club or a charitable organisation without compensation, e.g. travel or telephone costs. The conditions for tax deductibility are:
1. Legal claim and waiver: the donor must waive any existing legal claim to reimbursement.
2. Letter of waiver: the waiver must be voluntary and in writing.
3. No self-interest: The activity must not be carried out in the donor's own interest.
