[Osmf-talk] Taxing of donations to OSMF (was RE: Translations of the ODBL)

Jens Müller ich at tessarakt.de
Mon Aug 2 14:48:47 BST 2010


Am 26.07.2010 14:14, schrieb Jaak Laineste:
>> Am 26.07.2010 10:00, schrieb Jaak Laineste:
>>>  I have more practical case also: I just got informed that according
>>> to our law all the donations to some organization who is not in our
>>> national list of "non-taxable" NGO-s need to be taxed quite heavily
>>> (total ~50% of the given amount).
>>
>> "Not applicable", because it is inconsistent with European Union law ...
>>
>> You should inform the European Commission, DG Customs & Taxation.
>>
>> What kind of tax is this?
> 
> It is called "corporate income tax". I was a bit wrong, it is about 22%, not
> 50. 
> 
> Maybe it actually makes sense over here: it is meant to avoid to smuggle
> profits out of a company. Estonian companies do not have generally corporate
> income tax, as it is usual in many other countries; only profits which are
> cashed out (as dividends, salary or something) will be taxed.

OK, so it is comparable to just normal income tax.

> Until you do
> not take money out of the business then there is no income tax at all.
> Problem here is that donations are taken not as normal business cost item
> for a company, but more like cashing out profits.

Well, any non tax-deductible spending of such a business would be
treated the same as cashing out, right?


> However, our "Customs &
> Taxation" has special list of "tax advantage" NGOs to whom companies can
> donate money without need to pay the tax, these are different charity
> organizations, Church etc. I'm just preparing application to get our OSM
> Chapter also listed there too, but I'm not sure if we will succeed to show
> that OSM is more like a general charity than a limited hobby group. And as
> far as I know no foreign NGO can get to the list.

That would then be exactly the same situation as in Germany. Prior to
Persche, only donations to German non-profits (actually, the German term
"gemeinnützig" is somewhere between non-profit and charity - it means
something like "for the common good", and there is a positive list of
purposes which are considered to be worthy of tax deductability) were
tax-deductible.

Now, any donations to EU organizations are, provided the recipient would
be considered as gemeinnützig under German tax law if it were based in
Germany. (Additionally, an "Inlandsbezug" has to exist, but that is
probably again against EU law). The tax payer has to prove that the
recipient fulfills the criteria, which makes the whole process quite
impractical ...


> Btw, what is situation in Germany or UK - does company need to pay some
> extra taxes if it gives money (or other support) to a NGO? If company anyway
> needs to pay corporate income tax, then maybe there is just no need for the
> extra taxing of donations.

Well, the question is just the same as in Estonia, right? It is about
what expenses of a company count as tax-deductible. IMO, it does not
make a difference (at least conceptually) whether profits are taxed
annually or when they are cashed out.

Best regards,

Jens



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