Donations for earthquake victims in Turkey and Syria

In February 2023, a devastating earthquake struck Turkey and Syria, causing severe suffering and infrastructure damage. The Federal Ministry of Finance has taken measures to facilitate support without tax obstacles.

Simplified donation receipt: A disaster relief decree is in effect until 31 December 2023. This decree allows, among other things, a simplified proof of donation. Instead of the usual donation receipt, a cash deposit slip or booking confirmation from a bank is sufficient (BMF letter dated 27.2.2023).

Further regulations concern measures by tax-privileged organisations helping those affected by the earthquake, the tax treatment of donations from business assets, payroll tax issues, and more.

Donations for earthquake victims in Turkey and Syria

What goodwill regulations apply to donations for refugees?

Refugees in Germany continue to seek protection from war and displacement. Thousands of dedicated citizens, companies, initiatives, and organisations continue to help the arriving refugees with personal and financial commitment to ensure their care and support.

To promote and support this societal commitment in helping refugees, the Federal Ministry of Finance introduced simplified tax regulations. They apply from 1 August 2015 to 31 December 2016 (BMF letter dated 22 September 2015).

The federal and state governments have now agreed to extend the tax relief for refugee aid beyond 2016 until 31 December 2021 (BMF letter dated 5 February 2019). Thus, as in 2016, the following regulations apply in 2018 and 2019 onwards:

• For donations to special accounts of aid organisations to support refugees, the simplified proof of donation applies - without any limit on the amount. Proof can be provided, for example, by a cash deposit slip, a bank statement, or a printout from online banking.
• Exceptionally, donations to private fundraisers for the benefit of refugees are also eligible. Often, dedicated citizens set up donation accounts on special occasions, e.g. birthdays, weddings, christenings, funerals, anniversaries, and ask for donations instead of gifts.
• All charitable associations may collect donations for refugees, regardless of their actual statutory purposes. The special campaign must be indicated.
• All charitable associations may use their free financial resources to support refugees, even if refugee aid is not regulated in the statutes. The statutorily required amendment of the statutes is not necessary. However, it must be ensured that these funds are not earmarked by the donor for another purpose.
• If employees waive parts of their wages or parts of an accumulated credit balance and the employer makes a payment to the donation account of a recognised aid organisation, this wage portion remains tax-free.

Currently, the BMF has issued special regulations for supporters of Ukrainian refugees. This means that the tax authorities want to help supporters with various tax relief measures. Details are regulated in the BMF letter dated 17 March 2022 (IV C 4-S 2223/19/10003).

What goodwill regulations apply to donations for refugees?

Save tax with expense donations

Many people engage in voluntary work in clubs and associations, organisations, and churches. This applies to board members, club members, freelancers, and other service providers. They not only volunteer their time and effort but also cover related expenses themselves. If you have a contractual or statutory claim for reimbursement of expenses and waive it, you can claim your expenses as so-called expense donations and at least receive a tax refund from the tax office (§ 10b para. 3 sentences 5-6 EStG). Currently, the Federal Ministry of Finance has revised and tightened the rules for expense donations (BMF letter dated 25.11.2014, BStBl. 2014 I p. 1584):

• The tax authorities generally assume that voluntary members of a club work without payment for the club and provide their services without a claim for reimbursement of expenses. HOWEVER, you can refute this assumption. For example, a voluntary conductor of a music club, who does not receive a fee for their work, may at least have their travel expenses to rehearsals and performances reimbursed. The same applies to a sports club coach.
• You must have a legal claim to reimbursement of expenses from the club, allowing you to request reimbursement of your expenses from the club. This claim must be granted through the club's statutes, an agreement, or a legally valid board resolution, provided the board is authorised to do so by a regulation in the statutes. This "statutory authorisation" is new and only required for new establishments from 2015. A verbal promise from the club chairman to reimburse costs is no longer sufficient. The claim must be granted before the relevant activity begins.
• You must waive the claim for reimbursement of expenses, unconditionally and promptly. This is the case if the waiver is declared within three months for one-off claims and every three months for regular activities.

If a club established before 1.1.2015 grants reimbursement of expenses based solely on a legally valid board resolution without explicit statutory authorisation, the statutes do not need to be amended solely to grant this authorisation.

An expense donation is not a donation in kind (in the form of self-borne expenses) but a (shortened) cash donation. This is because it is not the expense that is donated, but the monetary amount corresponding to the expense reimbursement. It is not necessary for money to flow between the donor and the club. Therefore, the underlying expense does not need to be specified in the donation receipt, only the corresponding monetary amount. However, the club must document this in its records. The donation receipt must include the following confirmation: "This is a waiver of reimbursement of expenses".

If there is no legally valid claim for reimbursement, the following option is available: Have your expenses reimbursed and then pay them back into the club's account as a cash donation. Ensure that the payout and payment do not occur simultaneously, as the tax office might otherwise assume a sham transaction in accordance with § 42 para. 2 AO and not recognise the donation. In this case, money must actually flow.

Save tax with expense donations

What can I deduct as donations and membership fees?

You can deduct donations and membership fees for the promotion of tax-privileged purposes. These include:

• Charitable purposes
• Benevolent purposes (e.g. workshops for the disabled, meal services or drug counselling centres)
• Church purposes
• Political parties
• Independent voters' associations
• Charitable associations and organisations
• Public institutions in Germany: e.g. universities, universities of applied sciences, research institutes, authorities, schools, state museums, state hospitals
• Legal entities under public law in Germany: e.g. city and municipal administrations, municipal associations, federal states and the federal government, as well as churches

However, donations for a club's commercial business operations are not deductible. For example, if you donate drinks for a club festival, you cannot enter this in your tax return.

To deduct donations from tax, they must be made without receiving anything in return. You can deduct not only cash donations. Donations in kind, expense donations and remuneration donations are also considered tax-relevant.

What can I deduct as donations and membership fees?

How much can I deduct for donations and membership fees?

Tax-privileged purposes include charitable, benevolent, and religious purposes, as well as the promotion of political parties and voter associations under certain conditions. Since 2007, previously specially promoted cultural and scientific purposes have been part of charitable purposes.

Donations for such privileged purposes are deductible as special expenses up to a total of 20% of the total amount of income. If donations exceed the maximum amount, the excess can be carried forward to the following year and considered within the maximum limit. This donation carryforward is unlimited in time.

Just like donations, membership fees are generally deductible as special expenses within the deductible donation limit. However, this only applies to "altruistic" purposes and organisations that do not offer benefits to the members themselves, e.g. Caritas, Lebenshilfe, DLRG. Membership fees to clubs that promote leisure-related charitable purposes with "self-interest", e.g. sports clubs, music and singing clubs, marching bands, theatre clubs, local heritage clubs, traditional costume clubs, carnival clubs, animal breeding and plant breeding clubs, model flying clubs, dog sports clubs, are not deductible.

In addition to monetary donations, you can also claim donations in kind for tax purposes. If you wish to donate your old clothes to a charitable organisation, you will need a donation receipt from them listing the market value and condition of the clothing items.

Your taxable gross income: 45.000 Euro, minus income-related expenses: 3.000 Euro, total income: 42.000 Euro

You can claim donations and membership fees of up to 8.400 Euro (20 percent of 42.000 Euro) as special expenses for tax purposes.

How much can I deduct for donations and membership fees?

What donations are not tax-deductible?

The tax officer does not accept every donation and membership fee as a special expense.

Here are some examples:

The judge orders the defendant to pay a fixed amount to a charitable organisation. The convicted person cannot, of course, deduct this "involuntary" donation from their taxes, as it was not made voluntarily and without consideration.

Membership fees for sports clubs cannot be deducted by the taxpayer.

Contributions to carnival, local heritage, animal breeding or choral societies are also not recognised by the tax office.

However, there is a new development: If you belong to an organisation involved in nature, welfare, gender, animal or monument protection, you may deduct both your donations and membership fees from your taxes.

Membership fees to organisations promoting the following purposes are not deductible: Sport, cultural activities for leisure purposes (e.g. singing, music, theatre clubs), local heritage and folklore, animal and plant breeding, allotment gardening, traditional customs including carnival, soldiers' and reservists' support, amateur radio, model flying and dog sports.

Organisation A promotes science and research, while Organisation B also promotes sport according to its statutes. Donations and membership fees to Organisation A are deductible as special expenses, but for Organisation B, only donations are deductible, not membership fees. The decisive factor is the entry of the organisation's purpose in the statutes, not the actual activities of the organisation.

The Federal Fiscal Court has recently ruled that membership fees to organisations primarily serving leisure activities cannot be deducted as special expenses in income tax. This also applies if, for example, a music club promotes another purpose in addition to "cultural activities with self-interest", such as musical training, cultural and church music events, music festivals and music competitions (BFH ruling of 28.9.2022, X R 7/21).

What donations are not tax-deductible?

What are donations to recipients in EU/EEA countries?

Previously, donations were only recognised for tax purposes if the recipient was based in Germany. The Federal Fiscal Court responded to a decision by the European Court of Justice and ruled that donations to charitable organisations based in other EU/EEA countries can also be deducted from tax in Germany.

For the donation to be recognised by the tax office, receipts and certificates must be provided, and the charitable status of the recipient must be verifiable.

What are donations to recipients in EU/EEA countries?

How do I provide evidence of donations to the tax office?

Donations and membership fees were previously only recognised for tax reduction if the donation receipts and proof of membership fees paid were attached to the tax return or sent to the tax office after electronic submission. In certain cases, simplified proof, such as a bank statement, was sufficient.

Since 2017, the obligation to submit receipts has been changed to an obligation to retain receipts: Donation receipts or corresponding proof no longer need to be submitted with the tax return. Instead, they only need to be presented if requested by the tax office. This is possible up to one year after the tax assessment notice is issued. Therefore, the donor must keep the receipts for this period (§ 50 para. 8 EStDV 2017).

The new obligation to retain receipts applies to donations made from 1 January 2017. However, receiving a donation receipt is still a prerequisite for the donation deduction. Therefore, make sure you receive a receipt. But you no longer need to submit the receipt with the tax return, only upon request by the tax office.

The donor can authorise the donation recipient to electronically submit the donation receipt to their relevant tax office. For this purpose, they must provide the donation recipient with their identification number. The authorisation can only be revoked with future effect. The donation recipient must make the data transmitted in this way available to the donor electronically or as a printout upon request. This has the advantage for the donor of not having to keep or present a donation receipt in their own tax procedure. At the same time, the donation recipient would no longer be obliged to keep a duplicate of the donation receipt (§ 50 para. 2 EStDV).

A formal donation receipt in the official format is not always required. Proof such as a bank statement, cash deposit slip, transfer slip or direct debit slip is sufficient for

• Donations up to 300 Euro made to a charitable, benevolent, church or religious organisation or to a domestic legal entity under public law or a domestic public authority.
• Donations in disaster situations paid into a special account within a certain period. Such a special account may only be set up by officially recognised welfare associations and their member organisations, as well as a domestic legal entity under public law or a domestic public authority. The amount of these donations is not relevant.

How do I provide evidence of donations to the tax office?

What are donations and membership fees for the promotion of scientific purposes?

If you make donations or pay membership fees to organisations that promote scientific purposes, you can deduct these from your taxes.

Scientific purposes are deemed to exist if the organisation conducts basic or applied research or holds scientific teaching or lecture events. You can also deduct the donation if the organisation publishes scientific works or maintains scientific collections or libraries. If the organisation you wish to support with a donation is not itself engaged in scientific activities but awards and funds research projects, it is also considered a beneficiary organisation.

Examples of organisations pursuing scientific purposes include:

• Universities,
• Universities of applied sciences,
• Colleges of education,
• Art colleges,
• Professional academies,
• Research institutes,
• State museums, or
• State theatres.

What are donations and membership fees for the promotion of scientific purposes?

What are donations and membership fees to promote religious purposes?

If you make donations or membership fees to organisations promoting ecclesiastical purposes, you can deduct them from your taxes. You support a church organisation with your donation if its activities aim to promote a religious community recognised as a public corporation. The religious community must be recognised as a public corporation nationwide or at least in one federal state. This includes not only the religious community itself but also its support associations.

The following examples are considered ecclesiastical purposes:

• Construction and maintenance of churches and church community centres
• Holding church services
• Training of clergy
• Providing religious education
• Funerals and remembrance of the deceased
• Management of church assets

What are donations and membership fees to promote religious purposes?

What are donations to promote charitable purposes?

The terms charitable and donation-eligible purposes are treated equally for tax purposes. These purposes are defined in the Fiscal Code and serve as the basis for claiming donations in the tax return. According to § 52 (2) of the Fiscal Code, these are charitable purposes:

• Promotion of science and research
• Promotion of religion
• Promotion of public health, particularly the prevention and control of communicable diseases, including hospitals as defined in § 67 of the Fiscal Code, and animal diseases
• Promotion of youth and elderly care
• Promotion of art and culture
• Promotion of monument protection and preservation
• Promotion of education, public and vocational training, including student assistance
• Promotion of nature conservation and landscape management in accordance with the Federal Nature Conservation Act and the nature conservation laws of the federal states, environmental protection, coastal protection, and flood protection
• Promotion of welfare, particularly the purposes of officially recognised associations of independent welfare services, their sub-associations, and their affiliated institutions and establishments
• Promotion of assistance for those persecuted for political, racial, or religious reasons, refugees, displaced persons, resettlers, late resettlers, war victims, war bereaved, war-disabled persons and prisoners of war, civilian victims and disabled persons, as well as assistance for victims of crime
• Commemoration of victims of persecution, war, and disasters, including the erection of memorials and monuments
• Promotion of the search service for missing persons
• Promotion of rescue from life-threatening situations
• Promotion of fire, labour, disaster, and civil protection, as well as accident prevention
• Promotion of international understanding, tolerance in all areas of culture, and the idea of international understanding
• Promotion of animal welfare
• Promotion of development cooperation
• Promotion of consumer advice and consumer protection
• Promotion of care for prisoners and former prisoners
• Promotion of gender equality
• Promotion of the protection of marriage and family
• Promotion of crime prevention
• Promotion of sports (chess is considered a sport)
• Promotion of local heritage and local history
• Promotion of animal breeding, plant breeding, allotment gardening, traditional customs including carnival, soldiers' and reservists' welfare, amateur radio, model flying, and dog sports
• General promotion of the democratic state within the scope of this law; this does not include activities that pursue only specific individual civic interests or are limited to the municipal political area
• Promotion of civic engagement for charitable, benevolent, and ecclesiastical purposes
• Promotion of the maintenance and care of cemeteries
• Promotion of the maintenance of memorials for non-burial children and foetuses

What are donations to promote charitable purposes?

What are donations and membership fees for the promotion of religious purposes?

If your donations are made to a religious community that is not recognised as a public corporation in at least one federal state, it may still be tax-privileged for "promoting religious purposes". However, for you to deduct these donations and membership fees, the religious community must be recognised as charitable by the tax office. Generally, religious purposes involve addressing questions about God, the interpretation of the world, the meaning and value of life, and moral norms, and motivating responsible action in church and society. According to the Federal Fiscal Court, a worldview is akin to religion. This means that not only religious but also secular and even anti-religious ideological communities are tax-privileged.

What are donations and membership fees for the promotion of charitable purposes?

If you make donations or membership fees to organisations promoting charitable purposes, you can deduct them from your taxes. This includes organisations that support people who are physically, mentally, or emotionally in need of assistance or who are in need due to their low income.

Such purposes are pursued by the following organisations, for example:

• Mothers' Recovery Organisation
• "Meals on Wheels"
• "Aktion Mensch"
• Support for the Mentally Disabled e.V.
• Facilities for the elderly, those in need of care, the disabled, the homeless, the sick, or orphans
• Counselling centres for drug addicts or
• Workshops for the disabled

What are donations and membership fees for the promotion of religious purposes?

What are donations and membership fees for the promotion of cultural purposes?

If you make donations or pay membership fees to organisations promoting cultural purposes, you can deduct these from your taxes. Your donations are deductible if they go to organisations or associations that support cultural institutions, as well as their support associations, e.g. theatres, museums, music schools.

However, you cannot deduct membership fees paid to clubs and institutions that promote cultural activities primarily for leisure purposes.

This includes singing, music, and theatre clubs, associations for local heritage and history, animal and plant breeding, clubs that maintain traditional customs including carnival, amateur radio, model flying, and dog sports clubs.

The Federal Fiscal Court has recently ruled that membership fees to clubs primarily for leisure activities cannot be deducted as special expenses in income tax. This applies even if, for example, a music club promotes another purpose alongside "cultural activities with self-interest", such as musical training, cultural and church music events, music festivals, and competitions (BFH ruling of 28.9.2022, X R 7/21).

Previously, the establishment of a free communication network and the management of servers, radio links, and lines were not considered charitable purposes, so Freifunk associations were not tax-privileged and donations were not deductible (e.g. LfSt. Bayern of 30.3.2017, S 0171.2.1-182/51 St31). However, since 1.1.2021, the promotion of Freifunk is considered a charitable purpose according to § 52 para. 2 no. 23 Fiscal Code.

As a result, Freifunk associations are now tax-privileged, and donations can be deducted as special expenses (introduced with the "Annual Tax Act 2020" of 21.12.2020). Different rules apply to membership fees to Freifunk associations: Since these associations promote leisure-related charitable purposes "with self-interest", the membership fees are not recognised. The associations are not allowed to issue donation receipts for this (§ 10b para. 1 sentence 8 no. 4 Income Tax Act).

What are donations and membership fees for the promotion of cultural purposes?

What are expense donations?

Many people volunteer in clubs and associations, organisations, and churches. This applies to board members, club members, freelancers, and other service providers. They not only contribute their time and labour for free but also cover related expenses themselves.

Such expenses, incurred in connection with the activity or the provision of items and thus saving the club money, are referred to as expense donations. Expense donations are tax-deductible if you have a claim for reimbursement of the expenses through a contract or statute and waive the reimbursement (§ 10b para. 3 sentences 5-6 EStG).

The conditions are:

(1)  A reimbursement claim is required: To waive the expenses you have incurred, you must have a reimbursement claim against the club. This claim must be granted seriously and must not be agreed upon on the condition that you waive it. Key indicators of seriousness are that the club is financially able to pay the agreed expense reimbursement and that the waiver declaration is made promptly when the claim becomes due.

(2)  The reimbursement claim must be legally binding: You must have a legal claim for expense reimbursement against the club, allowing you to demand reimbursement of your expenses from the club. Due to this legal binding, the reimbursement claim must be granted through statutes, contracts, or board resolutions. A verbal promise from the club chairman to reimburse the costs is not sufficient.

(3)  You must waive the reimbursement claim: This waiver must be unconditional and declared within three months for a one-off activity and within one year for a regular activity.

An expense donation is a (shortened) cash donation. It is not the expenses that are donated, but the cash amount corresponding to the expense reimbursement. It is not necessary for money to flow between the donor and the club. Therefore, the underlying expenses do not need to be specified in the donation receipt, only the corresponding cash amount. However, the club must document this in its records.

What are expense donations?

What is remuneration donation?

Many people volunteer in clubs and associations, organisations, and churches. This applies to board members, club members, sponsors, freelancers, and other service providers. However, unlike monetary and material donations, there is not automatically a tax benefit for personal work performance.

This is because the tax authorities generally assume that volunteer members of a club work for the club without payment and provide their services without any claim for reimbursement of expenses.

However, this assumption is - according to the Federal Ministry of Finance - rebuttable (BMF letter dated 25.11.2014). For this, however, there must be a written agreement between the club and the donor for contractual claims, made before the start of the activity. The work performance is tax-deductible if you have a legally valid remuneration claim and waive it. The donation is not the work performance itself, but the waiver of the agreed reimbursement claim.

The remuneration claim for the work you have done must be seriously granted and must not be agreed upon on the condition that you waive it. You must then waive this remuneration claim. The waiver must be unconditional and declared within three months for a one-off activity and within one year for a regular activity.

The remuneration donation or repayment is a (shortened) monetary donation. This is because it is not the remuneration claim that is donated, but the corresponding amount of money. It is not necessary for money to flow between the donor and the club. Therefore, the donation receipt does not need to specify the remuneration and the work performance, only the amount of money. However, the club must document this in its records. The donation receipt must confirm a "monetary donation".

What is remuneration donation?