Tax deductibility and donation receipts
1. Tax benefits for donors
Contributions to legally eligible recipients may be tax-deductible under the applicable conditions. These include tax-exempt bodies pursuing public-benefit, benevolent or religious purposes and certain public-law recipients. A proper donation receipt is generally required; statutory evidence concessions and permitted electronic transmission remain available.
For income tax purposes, an eligible contribution may be deducted as a special expense under § 10b EStG. Within the statutory calculation, the deduction reduces income and therefore generally taxable income, rather than directly reducing the tax amount.
Businesses, including corporations, may also obtain tax relief for donations if the statutory requirements are satisfied.
2. Requirements for tax deduction
All applicable conditions must be met, including:
Eligible recipient
The recipient must satisfy § 10b(1) EStG. For receipts issued by tax-exempt bodies, the conditions and time limits in § 63(5) AO must be checked in particular; under the conditions specified there, a determination under § 60a AO is sufficient. Foreign recipients are subject to additional requirements.
Voluntary contribution
The donation must be made voluntarily, without a legal obligation to donate.
No consideration
No benefit may be provided in return for the donation.
Distinction from sponsorship
An agreed economic benefit in return, such as an advertising service, must be distinguished from a donation. A simple acknowledgement or mention of a name is not automatically sponsorship without considering the circumstances.
Where consideration is provided, the payment is generally sponsorship rather than a tax-deductible donation.
3. Donation receipts
The donation receipt is the principal evidence for deduction. It is issued by the recipient and must follow the tax administration’s official form.
Different information is required depending on the type of contribution:
3.1 Monetary donations and deductible membership contributions
- Donor’s name and address
- Amount of the contribution
- Date of the contribution
- Confirmation of the recipient’s tax-privileged status
3.2 In-kind donations
- Precise description of the donated item
- The value applicable under § 10b(3) EStG and the required valuation basis; fair market value does not apply in every case
- Date of the contribution
3.3 Donations to foundations
- Additional information required under the special statutory rules for foundations
Note:
The issuer must prepare the receipt carefully and accurately. Intentional or grossly negligent issuance of an incorrect receipt may give rise in particular to liability under § 10b(4) EStG. Other tax consequences depend on the applicable statutory conditions.
4. Small donations: simplified evidence
For individual monetary contributions of no more than €300, simplified evidence may be used for the recipients specified in § 50(4) EStDV.
Under those conditions, the following payment evidence may replace a formal receipt:
- a cash deposit slip, or
- a bank booking confirmation.
The booking confirmation must show the name and account number or another identifying feature of both payer and recipient, the amount, booking date and actual execution of the payment. This includes in particular:
- donor’s name,
- recipient’s name,
- amount,
- booking date.
For a tax-exempt body under § 5(1) no. 9 KStG, the donor must also retain the recipient-produced document specifying the tax-privileged purpose, corporation tax exemption details and whether the contribution is a donation or membership contribution. This type of payment evidence is insufficient for in-kind donations or donations made by waiving expense reimbursement.
5. Deduction limits
The income tax deduction is limited to:
- 20% of the total amount of income (Gesamtbetrag der Einkünfte), or
- 4 per mille of the sum of total turnover and wages and salaries paid in the calendar year (§ 10b(1) EStG).
If contributions exceed the applicable limit, the unrelieved portion may be carried forward to subsequent years, generally without a time limit.
6. Membership contributions
Not all membership contributions are deductible.
Non-deductible contributions include in particular:
- membership contributions to sports clubs,
- membership contributions to bodies pursuing certain leisure, cultural and other purposes listed in § 10b(1), sentence 8 EStG.
Membership contributions are not excluded merely because they are payable under the organisation’s constitution. Alongside donations, § 10b EStG expressly permits deduction of certain membership contributions. The recipient, purpose and statutory exclusions are decisive. Genuine donations to a sports club may still be deductible if the conditions are met.
Notice
This information provides general guidance and does not replace individual tax advice.
If you are unsure, consult a tax adviser or the competent tax office.
