Cross border tax relief

In a landmark decision, the European Court of Justice ruled on 27 January 2009 that national restrictions on tax relief for cross border donations to charities in other European Union Member States are unlawful. This decision has significant implications for all charities throughout the EU.

The case was brought by a German resident who donated items to a Portuguese charity. The German tax authorities rejected his claim for a tax deduction in respect of the donation on the basis that the beneficiary of the gift was not a charitable body established in Germany. German law allows a deduction for tax purposes in respect of donations to charitable bodies established in Germany, but excludes this relief in respect of donations to charitable bodies in other Member States.

The European court of Justice ruled that the restriction imposed by the German authorities constituted a restriction of the free movement of capital, which is prohibited by EU law.

This ruling should result in a change of law in EU countries that impose similar restrictions.

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Read more about Transnational Giving: Taxation of Cross-Border Philanthrophy in Europe after Persche and Stauffer

Resources:

- Read more about UK Charity tax relief to certain organisations in Europe: EU gift aid proposals

- Read more about cross border donations on theĀ  EAPG Directory of Professional Advisers and Resources for Cross-Border Philanthropy and Charitable Planned Giving.

The Cross-Border Directory comprises:

  • A country by country contact list of professional advisers specialising in areas of relevance to charitable fundraising, international philanthropy, and planned giving.
  • Concise summaries of the diverse tax and legal frameworks impacting charitable giving in a variety of national jurisdictions across Europe and North America.
  • A diverse range of additional resources including links to relevant publications and websites.
  • The opportunity to contribute your own contacts and associates to our growing network of professional firms and charitable organisations seeking to advance international philanthropy

Attachments:

File: EU-gift-aid-proposals.pdf (50 kB)
Caption: UK charity tax relief
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