Deduction of expenses for voluntary work in the association
December 18, 2010 | 30,00 EUR | answered by Oliver Burchardt
Deduction of expenses as part of voluntary work as a board member in a larger non-profit association?
In 2009, I volunteered as a board member in an association. At the same time, I was self-employed professionally. Since my professional self-employment turned out to be not very successful, I volunteered in a larger association in the 'hope' of getting a job there. However, that didn't work out, I didn't get the job. Shortly after it became clear that it wouldn't work out, I found another job, which I did find. The question now is: Can I claim the (futile) expenses that I had during my work in the association as special expenses or similar? It is about 1,500 to 1,800 euros in a calendar year.
In principle, it would be simple for the association to issue me a donation receipt. However, that is not possible because we parted ways in dispute. Secondly, I also think the amount is too high. If I can deduct this, I would also like to know where I have to declare it in the income tax return and possibly in the trade tax return?
Finally, the question arises whether I can also deduct the costs incurred (mainly fees for lawyers and consultants) as well as the travel expenses incurred after the kilometer allowance? (That was about 5,000 km)
Normally, the answer to both questions in my opinion would probably be 'no'. However, in this case, there are significant parallels between my professional self-employment and the content-related work in the association, so that from my perspective, the aspect of 'professional advertising' is clearly visible.
Dear inquirer,
Thank you for your inquiry, which I am happy to answer as part of your assignment through initial consultation.
Please note that the tax assessment is based on the information provided.
In your case, pre-emptive business expenses may have been incurred. Such costs arise when a sufficiently specific connection can be established between the expenses and future income. According to your presentation, this seems to be the case. In this context, a judgment of the FG Münster is relevant to you, which has determined that expenses incurred by an intern in an unpaid internship can indeed be considered as pre-emptive business expenses (FG Münster v. 18.3.2003, case number 6 K 579/99 F). However, in this case, the intern's efforts have been successful.
You can claim these expenses as business expenses for non-self-employed activity in your income tax return.
However, I must point out that there will be a significant risk of enforcement in your case. In my opinion, the tax authorities will not consider your activities in the association as preparing for a future profession, but as activities that did not aim to generate income. Here, you have the burden of proof to create a meaningful documentation that proves that the purpose of your engagement was not in the context of voluntary work, but (unfortunately unsuccessfully) aimed at obtaining employment. This is especially true considering that any reimbursements that would have been paid to you by the association would have been tax-free income.
Therefore, I cannot recommend claiming these expenses as it will be very difficult for you to provide evidence. Furthermore, you should be prepared for the possibility that even an appeal will be unsuccessful, so you will have to pursue enforcement through legal means, incurring additional costs.
I regret not being able to provide you with a more positive response.
Sincerely,
Oliver Burchardt
Tax advisor
