What is a donation and what are membership fees?

Donations are generally voluntary and unpaid.

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, labour (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

 

The Federal Fiscal Court recently ruled that membership fees to clubs primarily serving leisure activities cannot be claimed as special expenses in income tax. This applies even if the club pursues other purposes alongside leisure activities, such as musical training or cultural events (BFH ruling of 28.9.2022, X R 7/21).