Tax deductibility and donation receipts
Tax benefits for donors
The tax deductibility of donations allows donors to benefit from tax advantages. To do so, they require a donation receipt, which can only be issued by charitable organisations. With this receipt, the donor can claim a special expense deduction and reduce their taxable income accordingly. Companies (corporations) can also claim donations as tax deductions.
Conditions for tax relief on donations
For a donation to be tax deductible, certain conditions must be met:
1. Valid notice of exemption: The recipient of the donation must be recognised as a tax-privileged entity and have a valid notice of exemption.
2. Voluntary: Donations must be made voluntarily, without legal obligation.
3. Free of charge: There must be no consideration for the donation.
4. Different from sponsoring: Donations must not include advertising services or other benefits for the donor.
Donation receipts
The donation receipt is an important document issued by the recipient of the donation to provide the donor with proof of his donation. It must include the official sample text in accordance with the requirements of the tax authorities and include specific information depending on the type of donation:
1. monetary donations/membership fees: amount, name of the donor, address, reference to charitable status.
2. donations in kind: exact description of the donated item and its fair market value.
3. donations to foundations: specific information according to the foundation.
Simplified donation regulation
For donations up to €300, a simplified donation receipt is sufficient:
1. cash deposit slip: with information on the donor, recipient, amount and posting date.
2. bank booking confirmation: similar information to the cash deposit slip.
This regulation applies exclusively to monetary donations and makes it easier to provide proof for smaller amounts.
Maximum limits for tax-deductible donations
The so-called ‘maximum limit’ for tax-deductible donations is 20% of the donor's total income in the respective assessment period. If the donation amount exceeds this limit, the excess amount can be spread over the following years, up to a maximum of seven years.
Donating membership fees
Not all membership fees are tax deductible. In the case of sports clubs in particular, membership fees are usually not considered donations, as they are considered compulsory contributions or levies owed by statute or by resolution of the club.
