Can a charity issue donation receipts and how does it work?
August 30, 2022 | 50,00 EUR | answered by Dora Krause
Dear Tax Advisor,
I am the chairman of a non-profit organization and we have recently received an increasing number of requests from donors who would like to receive a donation receipt from us. However, we have never dealt with this before and are unsure if we are even authorized to issue donation receipts.
Our organization is dedicated to environmental protection and regularly organizes clean-up events in our community. We finance our projects mostly through donations and membership fees. Unfortunately, the financial situation of our organization is currently not very good, as we have received fewer donations than usual due to the COVID-19 pandemic and the associated restrictions.
I am concerned that donors might withdraw their support if we are unable to issue donation receipts. At the same time, I want to ensure that we handle everything correctly and legally.
Can you please explain to me under what conditions an organization is allowed to issue donation receipts and how exactly this process works? Are there specific criteria that our organization must meet in order to be authorized to issue donation receipts? And what specific steps do we need to take to issue donation receipts?
I would be very grateful for your help and support in this matter.
Sincerely,
Johann Hagedorn
Dear Mr. Hagedorn,
Thank you for your inquiry regarding the issuance of donation receipts for your non-profit organization dedicated to environmental protection. I understand your concern regarding the financial situation of your organization and the importance of donation receipts for donors.
In Germany, non-profit organizations are generally entitled to issue donation receipts under certain conditions. A organization must be recognized as non-profit in order to issue donation certificates. The non-profit status is verified and confirmed by the tax office. Specific criteria must be met, such as the exclusive and direct pursuit of tax-privileged purposes, the selflessness of the activities, the benefit of a general public or a specific group of individuals, and compliance with the articles of association.
For your environmental protection organization, this means that your activities must serve environmental protection and that there must be no profit-making intention. Your articles of association should contain appropriate wordings that clearly define your non-profit purposes. Additionally, you must ensure that your organization's funds are used exclusively for non-profit purposes.
In order to issue donation receipts, donations from donors must be verifiable. This means that you must document donations in the form of money or goods. Donations must be voluntary and unconditional. For donations up to 200 euros, a simplified donation receipt is usually sufficient; for higher amounts, a donation certificate is required.
To issue donation receipts, you must submit an application for recognition as a non-profit organization to the competent tax office. This application should contain all relevant information about your organization, such as the articles of association, activity reports, financial reports, and planned projects. After review and approval by the tax office, you can then issue donation receipts.
I recommend that you consult a tax advisor or a nonprofit consultant to assist with this process and ensure that everything is handled correctly and legally. I hope this information is helpful to you and I am available to answer any further questions you may have.
Best regards,
Dora Krause
