Tax-privileged purposes

Tax law has a large number of benefits that have a specific promotional purpose. Benefits in cash or in kind that serve tax-privileged purposes are tax-deductible under certain conditions. Only corporations can pursue charitable purposes recognized for tax purposes (Section 51 AO).
Beneficiaries include charitable purposes, in particular the promotion of science, research, education, upbringing, environmental, landscape and nature conservation, youth and elderly care, sport and health care (Section 52 AO). Charitable and church purposes continue to be regarded as tax-privileged. The funding must be selfless, i.e. it must not primarily serve commercial purposes.

The beneficiary corporation must use its funds exclusively and directly for its statutory tax-privileged purposes (Sections 56 and 57 AO). To a limited extent, economic activities are harmless (Section 58 AO). The funds used are deductible within the framework of the respective tax type, for income tax (§ lob EStG), corporation tax (§ 9 I No. 2 KStG) and trade tax (§ 8 No. 9 and § 9 No. 5 GewStG) .

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