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FOUNDATIONS

Perhaps you thought, foundations are only for wealthy philanthropists. But primarily foundations are a useful, effective and especially sustainable tool to permanently use for many people and future generations. People with life experience who have performed a family role and were succsessful in their profession, make themselves strong at the age of social projects, but more and more young people donate money or do some volunteer. That they give a lot back to the society that once makes their success. The amount donated by you once acts far beyond the day, because unlike the donation, which is used in a timely manner, is the foundation's assets and will not be touched as it used to be a lasting legacy and to community projects.

Brought in not only your capital remains effective indefinitely, even you stay with your commitment and wish your name to posterity in mind. You can also express your regional solidarity. This is especially true for companies who want also take on social responsibility in their area.


SOCIAL

Unfortunately, it is now so that the social gap is widening more and more in our society. You can help by directly supporting a social project or investing your time. A endowment to a foundation also helps and has a lasting effect.  

   

ENDOWMENTS

Because endowments (external donations) are important in order to obtain permanent viable foundations, a different tax reduction applies to them from the normal donation.

 

endowments for companies
For companies that do not want to engage themselves socially, an endowment can have a positiv effect, as a one-time donation allows them to be acknowledged again and again.

Through an endowment the originally donated amount will not be used, instead the interest will continued to fund the selected project.

This endowment could of course also be increased and larger projects or even more projects can be carried out.

endowment generally

Whether natural or legal persons, they are independently an endowment to benefit from tax advantages of whether you have donated money or other values ​​(such as shares or property).

For amounts between € 10,000 and € 250,000, it is a useful alternative to bring the amount on an already existing foundation in the endowed assets. In this case, the administrative costs - which is defined by the Law on Foundations - minimal. This means that a much larger proportion of the funds made available directly benefit the Foundation tasks. This is also the advantage over the establishment of a private independent foundations.

There are in addition to the endowment to the basic assets of a foundation more lasting ways of philanthropic activities:

  • Foundation or Trust Fund Donors - Use the existing foundation structure

  • Donors loans, see below


Special edition deduction
for external donations (special tax amount)

Special expenses pursuant to § 10 b paragraph 1a EStG are up to a maximum of up to 1 Mio Euro in the year of the grant itself, and over the following next nine years.

After 10 years, still not "consumed" amounts go into general indefinite donations (b § 10 Section 1 Sentence 1 ITA). The special edition deduction applies only to donations in the assets of a foundation stock (endowment). Thus, the donation enjoys the same preferential tax treatment as a first donation for a newly established foundation. This amount of 1 Mio. Euro is doubled for jointly assessed persons.

This is done according to the request of the donor's choice of the year of the grant or any evenly or unevenly distributed on the grant year and the following nine years.

Example:

In 2016 Mrs S makes a donation to a non-profit foundation in the amount of 25,000 Euro. For optimum tax relief Mrs S sought the advice of their tax consultant deduction for 2016 with 0 Euro, with 8,500 Euro for 2017, for 2018 with 0 Euro, with 10,500 Euro for 2019, for 2020 with 3,500 Euro and 2,500 Euro for 2021.

 

FOUNDATION GRANT

Do you want to help but you do not know if you need your capital in the future (eg for retirement)?

Under this condition the foundation grant is the right thing. The foundation grant will invest your money for the foundation. Income (interest) flowing into the projects of the Foundation to convert your profitably interest into concrete projects.

The advantage is that your capital continue exist for you and for example for your retirement. You leave the Foundation only the interest and can at any time once again have your assets. A positive side effect is that you do not have to specify at your tax office this interest. Another advantage is that a foundation which is recognized as a charity have not to pay any tax regading the interest.

So 100% from the interest will come to the project. From a height of 801.00 Euros in interest income you have a deduction of more than 25% (Germany), that does not apply to the Foundation and is advantage for the non-profit project, see example below.

At the same time the foundation grant is a way for you to "test" our Foundation so you could later convert to your request, the foundation grant partially or completely in a endowment.

 

LIFE SITUATION

Anyone can help through a single or regular donation or endowment.

You can combine your donations with personal events, such as the celebration of your birthday or your wedding anniversary. It is also possible, as part of a funeral instead of flowers and wreaths to ask for a donation for a specific non-profit organization.

More and more often descendants are missing in our society. If so, then the inheritance falls automatically to the state. Those who want to arrange things differently can also use a foundation as an heir. With each donation in favor of a non-profit foundation, is that the estate tax is eliminated. In this way, the support comes fully to the social purpose. The foundation can be used with or without their own offspring as your heritage.

The same applies for a gift and the associated gift tax is not due for a grant to a charitable foundation.

 

 

According to the Real Estate Transfer Tax Act Land Gifts are not the foundation of the real estate transfer tax.

 

Transfer heirs and beneficiaries of donations inherited within 24 months or assets donated to a foundation, will void the inheritance or gift tax.

Inheritance tax already paid will be refunded.

 

 

SUPPORT FROM THE GOVERMENT

By the tax exemption certificate from the Tax Office, the non-profit foundation is not paying any withholding tax to the state. Normally, interest earnings, which amount to an individual than the free allowance of € 801.00, subject to 25% withholding tax. In addition to these 25% is the solidarity surcharge and church tax, if you belong to a church (concession).

 
Example:

€ 40,000 investment to 2,5% >> € 1,000 interest per year.

After the exhaustion of the free allowance it comes to the deduction of withholding tax and the solidarity surcharge, it will be of interest to only about 736.20 euros. At non-profit foundations thanks to the support from the state, the full € 1,000 are for non-profit project.

 

INSPETICON

The tax office and the foundation supervisory regularly check the charitable status, so is guaranteed at all times, that the non-profit foundation supports the community on material, spiritual or moral area selflessly (§ 52 AO).

 



 

 

 

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