Donation in the Tax Declaration – Can It Be Deducted from Taxes?

In the world, there is no shortage of people who provide material assistance to those in need. This is no different in Germany, where studies show that German citizens donated a total of 5.4 billion euros in 2020. It’s good to know that helping people is not indifferent to the tax office. The state is keen to support the helpers with special benefits. Today we will discuss whether donations are tax-deductible. And if so, what does that look like in practice? For more information, read through the rest of the article.

Donation and Tax Refund in Germany

Helping pays off– in both figurative and literal sense. At least it does in Germany, wherethe tax authorities treat taxpayerswho donate their own money for charitable purposes throughout the yearfavorably.Can a donation bedeclared on the tax return?Yes – when you submit your annual tax return to the tax office, you can state that you made a donation, whichshould lead to a reduction in income tax.

Donations in the tax return – what does the tax office think?

Before we get into how adonationcan reduce taxesin Germany,we want to briefly examine the definition of such a donation itself. According to German tax law, it is avoluntary gift of money or goods for which the donor receives no consideration. The tax authorities differentiate between three types of donations:

• for charitable purposes,
• to the assets of foundations,
• contributions to political parties

Claim donations on taxes – not every donation is eligible

You already know that donations are tax-deductible. However, you must know thatnot every donation in Germany is legally treated as a donation.

A donationcannot, for example, consist of participating in a charity lottery– in such a case, the taxpayer receives a ticket in return, which offers a chance to win. In other words, although we give money, we end up with a benefit for ourselves, and that is –according to the law – incompatible with the idea of selfless help inthe form of a donation. It is worth learning this to avoid disappointment when dealing with tax authorities in the future. In donations,membership fees for leisure clubssuch as sports clubs are not included.Conditions for

tax-deductible donationsin GermanyFor the deduction of special expenses to be taxed as

donationscertain conditions must be met. Firstly,such a donation can,not exceed 20% of your total annual income. For example, if your income is 40,000 € per year, you can deduct donations up to a maximum amount of 8,000 € (for companies, the maximum amount is 0.4% of annual sales).This applies, among other things, to donations to charitable, religious, or scientific institutions. If a taxpayer donates too much,the surpluscan be carried over to the next year

Dies gilt u. a. für Spenden an gemeinnützige, kirchliche oder wissenschaftliche Einrichtungen. Wenn ein Steuerpflichtiger zu viel spendet, . For example, if your income is 40,000 € per year, you can deduct donations up to a maximum amount of 8,000 € (for companies, the maximum amount is 0.4% of annual sales).“Other”. If this is the case, a cross must be placed in line 6 of the tax return underso that the authorities can take the remaining amount into account.IMPORTANT: The general special expenses lump sum is 36 € per year, but it does not affect the deductibility of donations. Donations can be claimed in full (up to the legal limits) regardless of this lump sum.Kreuz gesetzt werden, damit die Behörden den Restbetrag berücksichtigen können.

Secondly,

the recipient of the donation mustfinance the items for which the donor sent the money openly and documented. Additionally, another condition must be met for the donation to be tax-deductible.The organization receiving the donationmust be based in Germany– regardless of where in the world it provides help.Donations in the tax return – what does this look like in practice?Tax-deductible donationsmust be listed in the

previously mentioned

Absetzbare Spenden annex ‘Special Expenses’. Is it necessary to send a donation receipt to the office? Or can you deduct adonation receipt?Since 2017, charitable organizations in Germany can transmit donation receipts electronically to the tax office. Nevertheless, it is recommended that donors keep their donation receipts, as the tax office may request them in certain cases.SRequirements for a donation in Germany – what else should you know?

The donation can be of any amount – it can be 10 €, 100 €, 1,000 €, 10,000 €, or any other value. However, if your donation does not exceed

300 €

(since 2021), you don’t have to worry too much about bureaucracy.In this case, the tax office does not require confirmation – or possibly a so-called simplified proof, such as a payment receipt or a copy of a bank statement.However, if you wish to donate more than 300€, the recipient of the donation mustfill out a receipt on a special form. This form should contain the following information:

the exact address of the recipient, the type and amount of the donation, a confirmation that the donation is used for a specific, tax-deductible purpose.

• Taxing donations – can the full amount be refunded?
• No, the donated amount is deducted from the taxable income. In other words, in practice,
• only the tax burden is reduced

. According to statistics,people who donate

receive about ⅓ of theirback. For political parties and electoral associations, the situation is slightly different: their donorscan deduct 50% of their donations and membership fees, but not more than 825 € per year(for joint assessment, it’s 1650 €).The topic of donations in the Germandonationtax return.

is unfortunately associated with bureaucracy. If you don’t know how to fill in your tax return correctly in this case, use theTaxando Tax Settlement application. If you choose the

PREMIUM package, you can rely on the support of an experienced tax advisor – save yourself the paperwork and enjoy secure tax refunds from Germany at an affordable price.ist leider mit Bürokratie verbunden. Wenn Du nicht weißt, wie Du Deine Steuererklärung in diesem Fall richtig ausfüllst, nutze die Anwendung Taxando Steuerabrechnung. Wenn Du Dich für das PREMIUM-Paket entscheidest, kannst Du auf die Unterstützung eines erfahrenen Steuerberaters zählen – spare Dir den Papierkram und genieße sichere Steuererstattungen aus Deutschland zu einem günstigen Preis.