West Law Report

EU charity tax allowance

Posted in Times Law Report by mrkooenglish on February 19, 2009

From The TimesFebruary 3, 2009

EU charity tax allowance
Court of Justice of the European Communities
Published February 3, 2009
Persche v Finanzamt Lüdenscheid
Case C-318/07

Article 56 EC on the free movement of capital enabled eligible tax deductions on gifts made to charitable bodies in the taxpayer’s state also to be claimed on gifts made to charities within the European Union outside the taxpayer’s state.

Where a taxpayer claimed, in one member state, the deduction for tax purposes of gifts to bodies established and recognised as charitable in another member state, such gifts came within the compass of the provisions of the EC Treaty relating to the free movement of capital, even if they were made in kind in the form of everyday consumer goods.

The Grand Chamber of the Court of Justice of the European Communities so ruled on January 27, 2009, when giving a preliminary ruling under article 234 EC on a reference by the Bundesfinanzhof, Germany, in proceedings in which the claimant appealed against his income tax assessment by the German tax authority after it had refused to allow the claimant to deduct as a special expense a gift of, inter alia, bedlinen, towels and toys that he had made to a children’s home established as a charity in Portugal, on the ground that under German law such a deduction could be made only if the charity was established in Germany.


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