Which expenses can we claim as tax-deductible for our association?
April 16, 2024 | 60,00 EUR | answered by Günther Schmidt
Dear Mr. Tax Advisor,
My name is Björn Bauer and I am serving as a board member of a non-profit organization. We are dedicated to promoting youth participation in sports and recreational activities. Lately, we have been exploring ways to improve our financial situation by identifying expenses that our organization can claim as tax-deductible.
Currently, we incur costs for renting our facilities, purchasing sports equipment, and organizing events. These expenses strain our budget, and we are interested in learning if and how we can deduct these costs for tax purposes. We are concerned that we may not be maximizing tax benefits or may be making errors in our accounting.
Therefore, I turn to you as an expert in non-profit taxation: What expenses can our organization claim as tax-deductible? Are there specific criteria or requirements that must be met in order to deduct these expenses? And how can we ensure that we include all relevant costs in our tax return?
We would greatly appreciate your assistance and guidance on this matter.
Sincerely,
Björn Bauer
Dear Mr. Bauer,
Thank you for your inquiry and your commitment to the board of the non-profit organization. It is very commendable that you are dedicated to promoting youth in the areas of sports and leisure activities.
Regarding the tax deductibility of expenses for your organization, there are some important points to consider. Generally, non-profit organizations can claim expenses incurred within the scope of their statutory purposes as tax-deductible. This includes expenses such as rent for club premises, purchase of sports equipment, and organization of events.
In order for these expenses to be tax-deductible, they must demonstrably serve to promote the charitable purposes of the organization. It is important that the expenses are reasonable and necessary, and are documented in a transparent manner. Additionally, expenses should be clearly distinguished from private expenses in order to not jeopardize any tax benefits.
To ensure that you consider all relevant costs in your tax return, I recommend keeping accurate accounting records and carefully preserving all receipts. It may also be helpful to seek advice from an experienced tax advisor to ensure compliance with all tax regulations and to avoid any errors in the accounting.
Additionally, make sure that your organization meets the requirements for charitable status in order to avail of tax benefits. This includes compliance with the statutory purposes, restriction of the use of funds to charitable purposes, and regular assessment of charitable status by the tax office.
I hope this information has been helpful to you. If you have any further questions or require more detailed advice, I am at your disposal.
Best regards,
Günther Schmidt
