Tax Deductions for Art Gifts - Germany

Artwork donations can be very beneficial to minimise German Capital gains tax liability that may arise, say, from the sale of shares, bonds, investment property or other financial assets or reduce income tax.

Corporate Donors: A tax deduction on the taxable income is possible up to 20% of yearly taxable income (or 0.4% of the sum of the turnover and salaries).  A donation by a corporation can only be deducted for the following five years. Donations by German residents to non-resident foundations are not deductible for income tax purposes. The tax deduction for the donation is only given if the donation is made to a qualifying resident entity. 

Individual Donors: A tax deduction on the taxable income is possible up to 20% of yearly taxable income.  Individual donors can deduct the maximum amount of one million EUR over a period of 10 years (the amount can be carried forward for a period of up to 10 years). Donations by German residents to non-resident foundations are not deductible for income tax purposes. The tax deduction for the donation is only given if the donation is made to a qualifying resident entity. Donations to resident foundations carrying out projects abroad enjoy the same privileges as donations to foundations operating in Germany. In these cases the foundation has to prove to the German tax authorities that the donation is spent for the furtherance of purposes for the public benefit.

You can obtain more information on Cultural Gifts Tax Benefits in Germany by visiting http://www.gesetze-im-internet.de/estg/index.html