Deduct donations: Requirements
For donations to be tax deductible, they must be:
- monetary donations
- donations in kind or
- Membership fees for non-profit organizations, with the exception of sports clubs.
In addition, the organization must have been recognized by the tax office as a non-profit organization such as:
- Church congregations,
- non-profit organizations,
- local governments,
- public service organizations such as state museums, state theaters,
- Educational institutions such as schools, universities.
For more information on the different types of donations, see our blog post “Why Is It Useful to Donate?“.
Requirement to Provide Proof of Donations
Since January 2021, donations up to an amount of 300€ no longer require a donation receipt, but only a simplified donation receipt. This is, for example, the booking confirmation of a credit institution (account statement).
It is important that the name, the account number of the recipient and the donor, the donation amount and the booking date are written on it. The simplified proof of donation must be kept in a safe place (retention obligation) and only shown at the request of the tax office. For donations exceeding the amount of 300€, the tax office requires a donation receipt, which is issued by the donation recipient.
Declaration of Donations in the Tax Return
If one has donated for a charitable purpose, the amount is entered as part of the tax return in the annex “special expenses”. In total, up to 20% of the total annual income can be claimed for tax purposes.
Disclosure of Donations in Kind in the Tax Return
In-kind donations can be books donated to a library or clothing for those in need, for example In-kind donations can also be claimed for tax purposes if they:
- are used for the organization’s non-material purpose or
- Are used for the organization’s special-purpose operations.
To calculate the value of in-kind donations, they must first be divided into new and used items.
If the item is new, the value corresponds to the amount on the invoice. As proof, you need the proof of purchase.
For used items, the market value must be estimated. The purchase price, age and condition of the item play a role here. Based on this information, identical products, e.g. from (online) marketplaces or in classified ads, can be compared.