Foundation with legal capacity, recognition of non-profit status

Would you like to take advantage of tax benefits for your charitable foundation? Then you must have the charitable status recognized by the tax office. You can find information about this here.

Both founders and foundations can only claim tax advantages if the tax office has certified the charitable status of the foundation. From this date, the Foundation may issue donation receipts to donors and donors that have a tax-reducing effect.

In order to obtain tax benefits, the foundation statutes must stipulate:

that the Foundation pursues exclusively and directly charitable, charitable or ecclesiastical purposes,
the specific purposes of the Foundation,
the manner in which the statutory purposes are mainly achieved (e.g. holding scientific events or maintaining an old people's home),
that the Foundation acts selflessly and does not primarily pursue its own economic purposes,
that the Foundation's funds may only be used for statutory purposes,
that no person may be favoured by expenses that are alien to the purpose of the foundation or by disproportionately high remuneration and
that in the event of the dissolution or dissolution of the foundation or in the event of the cessation of tax-privileged purposes, the assets may only be used for tax-privileged purposes.

Hint: A foundation is also considered charitable if it uses a certain part of its income, but not more than one third of its income, to adequately maintain the founder and his next of kin, to care for their graves and to honour their memory.

If a foundation has been certified as a non-profit organization, it enjoys

tax exemption for corporation and trade tax,
in the case of VAT, in principle, the taxation of sales with the reduced tax rate of 7 percent (information on the exceptions, e.g. tax exemptions, full tax rate of 19 percent or small business regulation can be obtained from the tax office),
exemption from property tax, gift tax and inheritance tax under certain conditions,
Receipt of tax-privileged donations.

Tip: Further information on the tax treatment of foundations can also be found in the brochure "Steuerwegweiser für gemeinnützige Vereine" ("Tax Guide for Non-Profit Associations") of the Hessian Ministry of Finance