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Prerequisites

• The foundation pursues exclusively and directly non-profit, charitable or ecclesiastical purposes.
• The specific purposes of the foundation are stated.
• The statutory purposes are mainly realized in a specific way (for example, through scientific events or the operation of a retirement home),
• The foundation operates selflessly and does not pursue any commercial purposes.
• The foundation’s funds are used only for statutory purposes,
• No one will benefit from expenditure that does not serve the purpose of the foundation or from disproportionately high remuneration,
• If the foundation is dissolved or the tax-privileged purpose ceases to exist, the assets will only be used for tax-privileged purposes.
• With its statutes and its actual management, the foundation meets the requirements of tax non-profit status.

The foundation has:

• a name,
• Bodies acting on behalf of the Foundation,
• a foundation purpose, such as
  • Science and research,
  • Health modalities,
  • Art and culture,
  • Youth and elderly care
  • Adult and vocational education
  • sport
• a foundation statute
• Foundation assets (assets from whose income the work of the foundation is financed)

Documents required

• Articles of association or foundation deed (The valid, legally required model articles of association can be found in the links.)
• Proof of assets

Please note

Foundations are subject to legal supervision by the relevant authority. Since 2005, the judicial authority has been responsible for the care and supervision of foundations. This also includes coordinating the non-profit status with the tax office in the recognition process or in the event of changes to the statutes.

If the foundation is recognized as a non-profit organization, the following tax advantages apply:

• The foundation is exempt from corporate, trade, property, gift and inheritance taxes.
• To the extent that a non-profit foundation is subject to VAT, the reduced VAT rate of 7 percent applies to it
• The foundation can accept donations to promote its tax-exempt purposes. Receiving donations

A foundation is also considered charitable if it uses up to one third of its income to provide appropriate support to the founder and his or her immediate family, to maintain their graves and to honor their memory.

Deadlines

Every three years, the tax office checks whether the foundation still meets the requirements for tax exemption. You must therefore submit a tax return (form Gem 1) and enclose copies of your cash and activity or business reports.

Procedure

• Be sure to coordinate the draft statutes with the relevant authority in advance to clarify the non-profit status. This way you can make changes if necessary. A legal or tax advisor can also offer you valuable support in this regard.
• You apply for recognition of non-profit status in writing to the responsible authority.
• The responsible authority will examine your application and documents. If necessary, they will request further documents or information from you.
• The responsible body examines the statutes.
• You will receive a certificate.

Processing time

The processing time depends on the individual case.

Fees

no

Legal remedies

appeal

Legal basis

§§ 51 – 68 of the German Fiscal Code (AO)






Application Decree to the Tax Code