What requirements must be met in order to be exempt from taxes as an association?
July 9, 2024 | 55,00 EUR | answered by Günther Schmidt
Dear tax advisor,
My name is Benjamin Voigt and I am the chairman of a non-profit organization dedicated to environmental protection. We recently learned that our organization may be eligible for tax exemption, but we are unsure if we meet all the necessary requirements.
Currently, we pay regular taxes on our income from donations and membership fees, which places a significant financial burden on our organization. Therefore, we are very interested in finding out if it is possible to be exempt from this tax burden in order to use our financial resources more efficiently.
I am concerned that we may not meet all the requirements to be exempt as a non-profit organization. Therefore, it would be very helpful if you could specifically outline the requirements we need to meet in order to achieve this status. Are there any specific criteria that we do not currently meet and need to work on?
I would greatly appreciate it if you could guide us on the steps we need to take to be tax-exempt as an organization. We are willing to take all necessary actions to maximize our chances and further expand our contribution to environmental protection.
Thank you in advance for your support and expertise.
Sincerely,
Benjamin Voigt
Dear Mr. Voigt,
Thank you for your inquiry regarding the possible tax exemption for your non-profit organization dedicated to environmental protection. I am pleased that you are actively engaging with this issue and are interested in using your financial resources more efficiently.
To be exempt from tax as a non-profit organization, certain requirements must be met. First and foremost, it is important that your organization exclusively and directly serves tax-privileged non-profit, charitable, or church purposes. This means that all income and expenses of the organization must serve this purpose. Environmental protection generally falls under tax-privileged non-profit purposes, so your organization has good chances of being recognized as non-profit.
Furthermore, you must ensure that the statutes of your organization clearly define all necessary non-profit purposes and that the use of funds is determined accordingly. The actual management and use of funds must also comply with non-profit requirements.
Another important point is the submission of an annual tax return in the form of a corporate tax return for non-profit organizations. Here, you must demonstrate that all income and expenses have been properly recorded and utilized.
It is advisable to seek advice from a tax advisor to ensure that all requirements are met and the application for tax exemption is correctly filed. I am available in my online consultation hours to address any further questions and assist you in this process.
I hope this information is helpful to you and wish you success in applying for tax exemption for your organization.
Sincerely,
Günther Schmidt
