Transnational Tax-exemption for Donations in Europe

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While unloading my guilt of having flown not only to New York City and Greenland this summer but also Vilnius in Lithuania and supporting forestry projects. I came across a website of an organisation working to change that, I am only encouraged to donate to charities in my own country and cannot chose myself where I see the greatest need.

In many European countries, when you donate to an established charitable organisation you can deduct this in your income tax or there are other fiscal incentives.

At the EU level some things have been going on. Yes of course it is the EU that is allowing us to move towards a Europe where cross-border philanthropy is not just possible but also on an equal footing with national philanthropy.

There has been some individual complaints at EU level, the famous European Court cases “Stauffer”, “Persche” and “Missionswerk” and important and relevant European Commission infringement procedures (by DG taxation and Custom Union) requesting Member States to modify their treatment of taxpayers making donations to foreign-based public benefit organisations.

I first began thinking of this when I moved back to Copenhagen from living in London. There are many homeless people on the streets of London. I feel uncomfortable giving money to people begging in the street, so I set up a monthly contribution to Centrepoint. Moving back to Denmark with the strains of the financial crisis and the Government cut-backs I wanted to continue giving money to Centrepoint and I have continued my contribution every month. When moving back it made me think of the difference between my contributions to Danish and other European charities. When I donate to recognized public charity a donation exceeding 500 DKK (approximately €70) up to 14,500 DKK (approximately €1,950) are deductible from my tax bill every year. But when I give to a European
charity I can deduct nothing.

If donations to charity allow for tax deduction, then let me myself chose which charities I wish to donate to. I am sure there are plenty of ways to do this. One could be to make a European list of recognised charitable organisations, so I could deduct donations to any of these charities. Let me know if you have other ideas of how to make it easier to give.

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See more information on Denmark factsheet of Transnational Giving Europe compiled by Søren Friis Hansen, Copenhagen Business School. See also Transnational Giving Europe network published in partnership with the European Foundation Centre a study in July 2014, “Taxation of cross-border philanthropy in Europe after Persche and Stauffer – From landlock to free movement?”.

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One Comment on ““Transnational Tax-exemption for Donations in Europe”

  1. Jesper Lund

    Earlier this year, I asked the Danish tax authorities on Twitter about tax deductions for contributions to EU charities
    https://twitter.com/je5perl/status/429774389211455488

    The answer was that the charity must be on the approved list according to section 8 A in the Danish income tax law (ligningsloven).

    Section 8 A (2) states that the charity must be based in Denmark or another EU/EEA country
    https://www.retsinformation.dk/Forms/R0710.aspx?id=146323#p8A

    So Denmark may not be discriminating against EU charities. At least not in theory (legally).

    However, the EU charity must be able to handle the special Danish rules for deductions. Giving you a receipt is not enough. The charity must report the contribution to the Danish tax authorities with your social security number. That’s the only way to get the deduction. You (the taxpayer) cannot claim it yourself.

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