Do we have to pay taxes as an association, and if yes, how much?
October 12, 2023 | 50,00 EUR | answered by Günther Schmidt
Dear Tax Consultancy,
My name is Günther Krüger and I am the chairman of a non-profit organization. We are committed to environmental protection and regularly organize events to raise awareness about environmental issues. Now we are wondering whether we as an organization have to pay taxes and if so, how much.
Our organization is recognized as a non-profit and we mainly finance ourselves through donations and membership fees. We have not yet filed a tax return and are unsure if we are even liable for taxes. Therefore, we are reaching out to you to get clarity and avoid any potential consequences.
We want to ensure that we fulfill all tax obligations and do not encounter any unpleasant surprises. Therefore, it is important for us to know whether we have to pay taxes as an organization and if so, how much. Are there any specific regulations for non-profit organizations that we need to consider? How can we ensure that we comply with all tax regulations?
We look forward to your assistance and thank you in advance for your help.
Sincerely,
Günther Krüger
Dear Mr. Krüger,
Thank you for your inquiry regarding the tax liability of your non-profit organization. As a tax advisor specializing in association taxation and non-profit status, I am pleased to be able to assist you with your questions.
First of all, congratulations on your organization being recognized as non-profit and for your commitment to environmental protection. Non-profit organizations in Germany enjoy tax benefits, as they are exempt from corporation tax and trade tax under certain conditions. This means that your organization generally does not have to pay taxes on income from donations and membership fees.
However, there are exceptions and special regulations that you need to consider. For example, organizations can become subject to taxation if they operate economic businesses that do not directly serve the non-profit purpose. So, if your organization generates other income in addition to donations and membership fees, you should check if these are subject to taxation.
To ensure that you comply with all tax regulations, I recommend submitting a tax return for your organization. In this tax return, you must transparently disclose all income and expenses and demonstrate that they serve the non-profit purpose. It is important that you carefully keep all relevant documents and be able to present them when needed.
As a non-profit organization, you should also ensure that you regularly review the statute of your organization and ensure that it complies with current legal requirements. The statute should clearly define the non-profit purposes and include all necessary regulations for tax recognition.
If you have any further questions or need assistance with preparing your tax return, I am happy to help. I hope that my response will assist you in clarifying your tax questions and wish you success in your environmental protection initiatives.
Best regards,
Günther Schmidt
