A nonprofit foundation can operate in four areas. First of all, there is the ideal area:
In the ideal area of the foundation, donations (increase in assets) are public grants or donations. These pure inflows of money are of course not subject to taxation. This also applies to turnover tax, since no exchange of services takes place and the foundation is treated as a non-contractor.
Asset management in the ideal area
The assets are, however, only the income for the purpose of the foundation can be used. In order to achieve the highest possible income from the asset portfolio, professional asset management is necessary. Typical returns for the area of asset management are: interest, rents and leases. However, price gains can also be included.
It would make sense to tax these income in addition to tax. No, they should be one hundred per cent of the endowment. For this reason, there is also an exemption from trade and corporation tax. Turnover tax is somewhat different.
Taxation in the area of ideas
If taxable income (eg from a taxable rental) is applied, a reduced tax rate of 7% is to be applied (nevertheless, instead of the normal tax rate of 19%). If these sales are below 35.000 € per year, an average rate of 7% can be applied for the pretax. On balance, this does not result in a tax burden
- A non-profit foundation generates rental income of net 30.000 €
- these are to be taxed with 7% 2.100 €
- The average rate of 7% is deducted from revenue
- is formed and is therefore also. 2.100 €
- In sum, there is a tax burden of 0 €
Purpose enterprises of a donation are economically organized business enterprises, which, however, have the following three characteristics: The enterprise must serve directly statutory purposes. The operation must be directly necessary for the realization of the statutory purposes.
The holding must not be placed unfairly on unfavored farms in economic competition.
A foundation "Consist of Forgetting" has set itself the task to work up the terror of National Socialism and bring it to the young. For this she has rented a training room and generates income from lectures and publications on this topic.
The area is a purpose-built operation with the tax-advantaged consequences. It should be noted, however, that the income of 35.000 € already mentioned should not be exceeded for the tax benefit.
Economic business is defined as sustainable and self-employment for the purpose of generating revenue or other economic benefits beyond the scope of pure asset management.
These (contrary to the purpose of operation) do not directly contribute to the achievement of the statutory purposes and are in immense competition with other non-taxed traders.
However, the tax liability in the case of corporate income tax and trade tax also applies here only if the income exceeds 35.000 € per year. However, VAT is subject to the general tax rate of 19%, as long as there is no tax exemption.
The foundation itself does not have to operate these establishments directly. It is sufficient already if the foundation is involved. The tax consequences presented are also to be drawn.
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