Clubs and volunteers to be strengthened / Federal Council increases lump sum for trainers and volunteers

In December, the Federal Council passed the Annual Tax Act 2020, thereby adopting a series of tax improvements for volunteering citizens and associations. The main changes came into force on 01.01.2021.

As announced by the City of Offenbach's volunteer officer, Manuel Dieter, the annual lump sum for exercise leaders will increase from EUR 2,400 to EUR 3,000 from 2021 and the annual lump sum for volunteers from EUR 720 to EUR 840 (Section 3 No. 26 and No. 26a EStG).

The exercise leader lump sum cannot only be claimed for traditional activities as an exercise leader, for example in a sports club. The tax-free allowance also applies to activities as a trainer, educator, supervisor or comparable activities.

The so-called honorary office allowance benefits, for example, activities as a club board member, treasurer, groundsman, equipment manager, cleaning service, driving parents to children's away games or voluntary work as a referee in the amateur sector.

Manuel Dieter is delighted with the decision to better reward voluntary work from 2021. "In difficult times like these, we are once again seeing how immensely important voluntary work is for our society and good coexistence. That's why this tax improvement is a positive sign of recognition and appreciation of voluntary work. It is true that the focus of voluntary work is on the good cause and there is not always an expense allowance. However, many clubs and social institutions would not be able to carry out their important tasks without these people."

The lump sum for trainers and the lump sum for voluntary work relates to the period of one calendar year. It should be noted that the two allowances can be combined when performing different tasks - for example as a youth coach and simultaneously as a member of the club board - but they cannot be claimed at the same time for one and the same activity. However, this should be carefully examined in each individual case.

There are also significant changes for clubs. For example, the limit for the simplified donation receipt has been raised further. Previously, a donation receipt (donation receipt) had to be issued for donations of 200 euros or more. Since January 1, a cash deposit slip or booking confirmation from the bank will suffice as proof up to an amount of 300 euros.

The package also includes an increase in the exemption limit for profits from (taxable) business operations from 35,000 euros to 45,000 euros per year. In principle, non-profit organizations are exempt from income tax (corporation tax and trade tax) up to the tax exemption limit if they operate in accordance with their articles of association. "This helps the associations in two ways: they have more money to finance their charitable activities and at the same time they are relieved of bureaucratic burdens," continued Dieter.

Smaller non-profit associations and other tax-privileged organizations will also be given more time to use their funds. For corporations with an annual income of no more than 45,000 euros, the strict standards of timely use of funds no longer apply. They can therefore also use the funds received for their statutory purposes beyond the two-year limit that continues to apply to larger organizations.

The Annual Tax Act 2020 also increases the number of charitable purposes in the German Fiscal Code. This means that associations and other corporate bodies are now also charitable in the tax sense if they pursue the following purposes, among others

• Promotion of climate protection
• Promotion of free radio
• Promoting help for people who are discriminated against due to their gender identity or gender orientation
• Promoting the maintenance and care of cemeteries and promoting the maintenance of memorials for children and foetuses not requiring burial
• Promotion of local beautification

The list of so-called special-purpose enterprises that are eligible for tax relief has also been expanded. In future, these will include

• Facilities for the care, feeding and support of refugees
• Facilities for the care of people with mental and psychological illnesses or disabilities

"A great deal of commitment is already taking place in the newly included purposes and with their inclusion, these areas will also receive structural and sustainable support," concluded the city's volunteering officer.

Note

The information published in the press release only provides an overview of the changes mentioned. It is not intended as a comprehensive presentation and cannot replace individual advice from an expert tax consultant. No liability can be accepted for the accuracy of the content.