The boom in charitable organizations and foundations continues uninterruptedly in Germany. Each year, hundreds of new legally-recognized foundations are formed there. More and more socially minded individuals and entrepreneurs consider building a charitable foundation as they contemplate what to do with the wealth they have accumulated. Existing nonprofit organizations and business companies also follow suit - albeit regularly for other reasons.
German foundation tax law fuels the trend by conferring comprehensive tax advantages on charitable foundations as well as their founders. In this respect it is important to know that the tax benefits for charitable foundations are not - unlike e.g. in the USA - lower than those of other charitable organizations. On the contrary: Foundations are even better off in German tax law in some places than other legal forms like charitable associations or charitable LLCs.
German law also permits the establishment of foundations which do not promote charitable but purely private purposes. For example, so called family foundations serving the private interests of the founder and his family are generally taxed like any other legal entity. However, as long as they do not run a business – as is usually the case when a foundation merely serves to manage the founder´s assets – family foundations do not owe any trade tax, i.e. the total corporate income tax burden of a family foundation is typically 15,825% only.
Whether establishing a foundation is the right choice for you depends on a number of aspects, especially your current life situation, your plans and wishes and of course on whether you are a private individual or a company or an existing NPO. Provided that the establishment of a foundation comes into consideration for you (or your company or NPO), we will tailor the foundation to your personal situation.
Among other things, we can help you with the following:
- Deciding whether creating a charitable or family foundation makes sense, compared with alternative wealth disposition options,
- Advising on when a foundation can be a suitable vehicle for business and wealth succession, as well as (for business companies and NPOs as founders) for marketing and fundraising purposes,
- Creating your foundation (charitable foundation, family foundation, corporate foundation, foundation trust, mixed forms, etc.),
- Choosing the right jurisdiction within Germany (with its 16 German States (called “Bundesländer”)) or abroad in a foreign country; if you choose to form a foundation outside of Germany, we will work closely with colleagues in that country,
- Answering your questions on German foundation (tax) law and on regulatory questions with respect to the different regulatory authorities in the 16 German States,
- Taking advantage of all the tax benefits of a foundation and its founder and donors, specifically with regard to income tax, gift tax, and inheritance tax issues,
- Any other special tax considerations relating to charitable and non-charitable foundations, like withholding taxes, taxability of distributions, taxability of the foundation's business activities, VAT discounts, tax advantages with respect to foundation holding structures etc.,
- Answering your questions on fundraising, international giving and grantmaking, and endowment contributions, and
- Assistance with respect to all questions on German foundation law and German tax law that arise in relation to the day-to-day operation of your foundation.
What does that mean in specific terms?
- We develop result-oriented, practical and comprehensible solutions
- From A for approval of nonprofit status to Z for zero-rated activities - we provide advice on every NPO topic
- Life time cycle consulting: We advise NPOs in every phase of their life cycle - from foundation, via expansion to dissolution
- WINHELLER worldwide: We coordinate your legal and tax projects
- The more complex the problem, the greater our ambition - no matter what the NPO problem is, we won't break a sweat
- WINHELLER full service and one-stop-shop: We can do so much more than just "nonprofit" and will take care of all things necessary
- A "no" is not a solution for us
Your organization needs support? We look forward to hearing from you at +49 (0)69 76 75 77 80 or email@example.com.
We consider ourselves a one-stop shop for foundations and high net-worth individuals (HNWI): In addition to legal structuring and tax planning, we offer further services regularly requested by our clients like foundation accountancy (setting up an accounting system, producing yearly reports and financial statements, tax return filings, tax compliance etc.), and grant and donation documentation – all in compliance with German foundation law and German (nonprofit) tax law. From a financial perspective, we will be happy to refer you to external fundraising specialists who will work closely with you on issues such as soliciting donations and other third-party funding for your foundation.
Do you intend to form a foundation in Germany? Or do you seek legal advice on German foundation matters? WINHELLER are your competent, loyal, and independent advisors in matters of German foundation law, (nonprofit) tax law, asset protection and succession and estate planning. Our tax advisors and lawyers are happy to help you realize your charitable goals by setting up a charitable foundation or support you in structuring your assets and securing and providing for your family with the help of a family foundation. Feel free to contact
Uwe Müller and Boris Piekarek and their teams are looking forward to answering all your questions regarding German foundations and German foundation (tax) law. Just send us an e-mail (firstname.lastname@example.org) or give us a call (+49 69 76 75 77 80).