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July 05, 2021 /
Charitable foundations are not always automatically exempt from tax. It is important to differentiate between special-purpose operations and commercial business operations. You can find out below how these two forms of operation are to be distinguished from each other.
According to Section 14 sentence 1 AO, a commercial business operation is characterized by the following features:
Only if all of these aspects are met does it constitute an economic business operation. This form of charitable foundation is always subject to tax in Germany as soon as the annual gross income exceeds € 35,000.
Examples of commercial business operations are
Active sponsorship is also considered a commercial business and always exists if the corporate body actively participates in the advertising measures, e.g. in the context of advertisements placed in magazines. If, on the other hand, the sponsor is merely referred to (e.g. on posters, exhibition calendars, etc.), this does not constitute active sponsorship and therefore no tax is payable.
The difference to commercial business operations are so-called special-purpose operations. These are given in accordance with § 65 AO if:
Special-purpose businesses include, for example, retirement homes, kindergartens, youth hostels, museums, theaters and cultural concerts (in each case without the sale of food) or adult education centers. The tax exemption applies to them regardless of the income limit.