(2022) What is a donation and what are membership fees?

Donations are generally made voluntarily and without payment.

A donation is free from any obligation to the organisation, which may pursue charitable purposes. The amount is determined by the donor. Donations can be made in the form of money, goods, and, to some extent, services (time donations). In the latter case, only direct expenses such as necessary travel costs are deductible.

Membership fees, on the other hand, are defined by the organisation and have a fixed amount. They are also paid regularly. As a rule, they can only be paid in money. If a member pays more than the membership fee to a tax-privileged organisation, the difference is considered a donation.

Membership fees to clubs with "leisure-related" charitable purposes are not deductible. The club may not issue a donation receipt for the fees. This applies to:

• Sports clubs
• Music clubs
• Choir clubs
• Local heritage clubs
• Customs clubs
• Animal breeding clubs
• Dog sports clubs
• Carnival clubs

 

Currently, the Cologne Fiscal Court has ruled that charitable music clubs that do not provide training only as a subordinate activity may issue donation receipts for membership fees paid, and the donor receives a tax reduction for this (FG Cologne of 25.2.2021, 10 K 1622/18, Revision X R 7/21).