AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler, Schindler Attorneys
Charitable Private Foundation Please see 3. Trusts, Foundations and Similar Enti- ties regarding the general requirements of a private foundation. If the purpose of a private foundation is determined to be for the benefit of the general public, it is deemed to be a charitable private foundation. Such classifica - tion may lead to various tax exemptions. For example, the foundation entry tax of 3.5% on any donations to an Austrian charitable private foundation does not apply to charitable private foundations, and a charita - ble private foundation may be exempt from Corporate Income Tax and VAT in Austria. If the charitable pri - vate foundation is registered with the Austrian Federal Ministry as a beneficiary donation recipient, for which various requirements need to be fulfilled, donations may be tax-deductible at the level of the donor. Charitable Foundation Pursuant to the Federal Law on Foundations and Funds The Bundes - Stiftungs - und Fondsgesetz 2015 applies exclusively to foundations and funds whose assets are designated by an act of dedication under private law for the fulfilment of charitable ( gemeinnützig ) or benevolent ( mildtätiger ) purposes only. Private foun - dations, on the other hand, may pursue private inter - ests and/or charitable purposes. One difference is the capital required for the foun - dation. For the establishment of a private founda - tion (with a private or charitable purpose), at least EUR70,000 is required, whereas at least EUR50,000 is sufficient for the establishment of a charitable foun - dation according to the BStFG - Stiftung .
tary dispositions and contractual arrangements are particularly important.
10. Charitable Planning 10.1 Charitable Giving Charitable donations are generally not tax-deductible in Austria. However, there are exceptions in place, one of which is that donations to specific charitable institutions may be tax-deductible in an amount not exceeding 10% of the income. These institutions have to be registered in Austria in the list of beneficiary donation recipients of the Federal Ministry of Finance (BMF). 10.2 Common Charitable Structures A variety of legal forms for structuring charities exist in Austria, with the most common being: • the charitable association ( Verein ); • the charitable private foundation ( gemeinnützige Privatstiftung ); and • charitable foundations pursuant to the Federal Law on Foundations and Funds ( BStFG - Stiftung ). Charitable Association No share capital is required for the formation of an association, and the incorporation is rather simple. One advantage of an association is that an unlimited number of members or donors may be admitted. A non-profit association has legal personality and may therefore own property and assets. A non-profit association has to ensure in its statutes that its assets are used exclusively for non-profit purposes, even in the event of its dissolution. Such non-profit purposes are charitable ( gemeinnützige Zwecke ), benevolent ( mildtätige Zwecke ) or ecclesi - astical ( kirchliche Zwecke ). If these criteria are met, a charitable association may be tax-privileged.
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