SteuerGo FAQs

(2023) Save tax with donations

A donation can not only support the work of a charitable organisation but also reduce the taxpayer's own tax burden. However, the charitable gesture should be the main focus. Therefore, it is important to know who receives the donation and what they do with the money.

The German Central Institute for Social Issues (DZI) provides guidance. This non-governmental organisation awards a donation seal to reputable organisations. To receive this, fundraising organisations must meet certain criteria. The DZI evaluates the use of donations, fundraising costs, and administrative expenses. Advertising and administrative expenses must not exceed a "reasonable level". An amount exceeding 35 percent of the total expenditure of a charitable organisation is no longer considered reasonable.

Once an organisation has received the donation seal, it may advertise this on its website and other publications. The DZI currently lists around 250 donation organisations, from A for "action medeor" to Z for "Zukunftsstiftung Entwicklungshilfe". If an organisation does not have the seal, it does not mean it is disreputable, as applicants must pay fees to the DZI each year for the voluntary "donation MOT".

In such cases, it is helpful to look at the annual report of the respective association. These figures generally provide more information about the use of funds than a promotional leaflet.

In addition to peace of mind, donors have the positive side effect of being able to reduce their tax burden, as donations can be deducted from tax as special expenses.

The amount donated in the assessment year 2023 is entered in the income tax return (main form). Until 2006, proof of donation was required for donations of 100 Euro or more. This proof limit was raised to 200 Euro on 1 January 2007. Donation organisations usually send the relevant proof to financial supporters unsolicited at the beginning of the following year. For donations under 200 Euro, the tax office requires the taxpayer to provide appropriate bank statements, such as a transfer receipt and a bank statement.

However, beware, the tax officer does not accept every donation and every membership fee as a special expense. For example, membership fees for a sports club cannot be deducted by the taxpayer. Contributions to carnival, local, animal breeding, or singing clubs are also not recognised by the tax office. However, if you belong to an association involved in nature, welfare, gender, animal, or monument protection, you may deduct both your donations and membership fees from your taxes.

In contrast to donations to charitable organisations, donations to political parties (or membership fees) receive a direct tax reduction of 50 percent, but no more than 825 Euro (single) or 1.650 Euro (married). Any amount exceeding this can also be claimed as special expenses. The maximum amount is 1.650 Euro for singles and 3.300 Euro for married couples.

Incidentally, in addition to monetary donations, donations in kind can also be claimed for tax purposes. If you wish to donate your old clothes to a charitable organisation, you will need a donation receipt from them, listing the market value and condition of the clothing items.