Charity Reform Act 2023
Lump sum for volunteers
In order to provide tax support for the work of volunteers, which is important for society, and to ensure legal certainty in this area, an explicit legal regulation has been created for payments made by non-profit organizations to their volunteers in the form of the volunteer lump sum. The tax exemption covers payments made by tax-exempt corporations, i.e. those that serve to promote charitable, benevolent or ecclesiastical purposes. Only payments that are made voluntarily, i.e. that are not made on the basis of an employment relationship, are tax-exempt as a lump sum for volunteers.
The lump sum is limited and amounts to a maximum of € 30 per calendar day or € 1,000 per calendar year. For special activities, the lump sum can amount to € 50 per calendar day or € 3,000 per calendar year. These activities include social services (e.g. health care, welfare), assistance in the event of disasters (e.g. floods, landslides) as well as functions as instructors or trainers (e.g. work as a choir director).
Example: A music association pays € 50 to all musicians who played at the Christmas concert, € 30 of which is tax-free.
Articles of association of legal entities
The articles of association of legal entities must comply with the requirements of the Federal Fiscal Code (BAO) in order to create the conditions for tax relief. Therefore, even mere formal deficiencies in the articles of association lead to the loss of preferential treatment. The new regulation now stipulates that the legal entities must be requested to amend the deficiencies in the articles of association within six months. If the articles of association are subsequently amended and now meet the requirements of the BAO, this should also have retroactive effect for periods prior to the amendment. This means that the benefit can already be claimed for earlier periods.
For donors, the existing cap on deductible donations of € 500,000 will be removed without replacement. The 10% cap on deductible donations in an assessment period will be retained. However, in order to ensure an immediately higher asset base, a carry-forward option is introduced if the donation exceeds this 10% limit in a year. This carry-forward option is intended to provide an incentive to allocate the necessary sums in one year (e.g. land) and not to split them over several years for tax reasons.