GERMANY Law and Practice Contributed by: Christian von Oertzen and Philipp Windeknecht, Flick Gocke Schaumburg
Tax Reliefs for Donors Individuals can claim a tax deduction of up to 20% of their income in respect of gifts to tax-privileged organisations. In addition, an individual can deduct up to EUR1 million in any ten-year period in respect of contributions to the endowment of a tax-privileged foundation – that is, gifts of capital in respect of which the foundation may only distribute the income. A gift for tax-privileged purposes is free of inheritance tax. This also applies to gifts to charities in EU and EEA member states for income and corporation tax pur - poses. However, such gifts continue to be subject to gift tax unless a mutual recognition arrangement is in place, the applicable double-tax treaty provides otherwise or it is possible to structure the donation as a restricted gift, the use of which for exclusively charitable pur - poses is secured. 10.2 Common Charitable Structures Structuring charitable organisations plays a significant role in German tax and estate planning. Charities can be set up in a variety of legal forms, including as foun - dations, corporations and associations.
benevolent or religious. The statutory list of purposes in the public interest found in Section 52 of the Ger - man Fiscal Code is broad and includes: • the advancement of science; • art; • caring for the young or elderly; • education; • conservation; • social care; • caring for victims of persecution; • promoting international understanding; • accident prevention; • animal welfare; • international development; • consumer protection; • promotion of equal rights; and • sport. The local tax office has jurisdiction to decide whether a particular organisation has tax-privileged purpos - es. If so, the organisation is exempt from most taxes (except in so far as it carries out a commercial activity not directly related to its tax-privileged purposes).
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