Each taxpayer can deduct his or her donations (Spenden) from their income tax return (Einkommensteuererklärung). There are naturally conditions that must be met. We'll explain what a donation is exactly and how to deduct it.
What is a donation anyway?
In principle, money donations or other types of donations can be stated in the tax return. Donations of up to € 200 can be submitted to the tax office (Finanzamt) without a donation receipt (Spendenbescheinigung).
Donations can be deducted for tax purposes if:
• non-profit organizations benefit • Tax-shelter purposes are supported (steuerbegünstigte Zwecke) • they are voluntary and no services are provided in return • a donation receipt can be provided (Zuwendungsbestätigung)
Proof of donations
Tax offices (Finanzämter) require a donation receipt (Spendenbescheinigung) for donations to domestic recipients. This is also referred to as a grant confirmation (Zuwendungsbestätigung) in the technical jargon. It is important that the proof correlates to a standardized template.
The donation receipt has two functions. On the one hand, it is evidence of donations and, on the other hand, it is required for deducting the donation from your taxes. If you do not have a donation receipt, then only €200 can be deducted from your taxes for donations.
Excluded from the burden of proof (Nachweispflicht)
Naturally, there are always exceptions to the rule. There are four situations in which a donation receipt is not required.
The simplification rule applies:
• in the case of disaster situations • for donations up to €200 non-profit organizations • for donations up to €200 for state authorities • for donations up to €200 for political parties
Just a donation receipt is enough proof. This must include the name, the account number of the recipient and the principal and the date of the booking. Confirmation from a third party (Paypal etc.) is also necessary for online donations.
Information about donations (Sachspenden)
Many don't realize that donating objects (clothes, shoes etc.) is also tax deductible. The requirement for this is that the donation is intended exclusively for non-profit purposes.
This is the case if:
• Donations are ideally for deducting taxes for associations or • for special purpose enterprises (lottery, raffle etc.)
Exceptions are donations for the economic operation of a club (club celebrations etc.). The value of a donation is dependent on the market or market value. If the item is still new, the original price is to be taken into account. Second-hand items are priced according to what could be earned on it from selling it. Aspects such as the type of item and demand also play a significant role and must be taken into account in the price determination.