Corporation tax (Körperschaftsteuer) - Freistellungsbescheid (exemption notice recognizing charitable status)

• General Corporations (Körperschaften) can only be recognized as tax-privileged (non-profit/gemeinnützig) if they meet the requirements of §§ 51 ff. of the Abgabenordnung (AO, Fiscal Code). Under these provisions, a corporation is non-profit only if, according to its Satzung (articles of association) and its actual conduct of business, it selflessly, exclusively and directly promotes the general public (§ 52 para. 1 AO). • Satzung (articles of association) Tax-privileged corporations must define their purpose and the measures intended to fulfil it in their Satzung (articles of association) precisely enough that it is beyond doubt which specific tax-privileged purpose is being pursued and how this purpose is to be achieved. Several privileged purposes may also be pursued side by side; in that case, the requirements for the articles of association must be equally met for each of them. In Annex 1 to § 60 AO, the legislator has made the use of the Mustersatzung (model articles of association) a legal requirement. This model contains only the provisions necessary for tax reasons, without taking into account that certain provisions must be included in the articles of association from the perspective of association law or commercial law. If the requirements for the articles of association are met, the Finanzamt (tax office) issues the corporation a Feststellungsbescheid (assessment notice) within the meaning of § 60a AO, confirming compliance with the requirements for the articles of association under §§ 51, 59, 60 and 61 AO. • Freistellungsbescheid (exemption notice) With the Freistellungsbescheid (exemption notice) (exemption from corporation tax under § 5 para. 1 no. 9 KStG (Corporation Tax Act) and § 3 no. 6 GewStG (Trade Tax Act)), the tax-privileged corporation is confirmed, after review of its actual conduct of business, to be recognized as serving non-profit (or charitable or church) purposes in the years named in the notice. The review is generally carried out for the three preceding years. To receive the notice, the corporation must submit a Körperschaftsteuererklärung (corporation tax return) together with a statement of income and expenditure, as well as an activity report and an overview of assets, to the Finanzamt (tax office). • Electronic submission www.elster.de/eportal/start The corporation tax return for tax exemption must be submitted electronically. Returns submitted on paper are treated as not having been submitted, except in special cases of hardship. • For the online application: registration/login on the ELSTER portal • For the online application: activated online ID function (eID) or Elster certificate

• Determination of profits • Activity report • Statutes (Satzung)

• Körperschaftsteuererklärung (corporate income tax return) www.elster.de/eportal/formulare-leistungen/alleformulare/kst

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• Körperschaftsteuergesetz (KStG – Corporation Tax Act) § 5 para. 1 no. 9 www.gesetze-im-internet.de/kstg_1977/__5.html • Gewerbesteuergesetz (GewStG – Trade Tax Act) § 3 no. 6 www.gesetze-im-internet.de/gewstg/__3.html • Abgabenordnung (AO – Fiscal Code) §§ 51 et seq. www.gesetze-im-internet.de/ao_1977/ • Finanzämter-Zuständigkeitsverordnung (FÄZustVO – Tax Office Jurisdiction Ordinance) gesetze.berlin.de/bsbe/document/jlr-NNLBE00004880

As a rule, the Finanzamt für Körperschaften I (Tax Office for Corporate Bodies I) is responsible for tax-privileged corporate bodies within the meaning of 5 para. 1 no. 9 KStG (Corporation Tax Act) and § 3 no. 6 GewStG (Trade Tax Act). If the non-profit corporate body is affiliated with another company, responsibility may also lie with the Finanzämter für Körperschaften II, III and IV (Tax Offices for Corporate Bodies II, III and IV). Special areas of responsibility (Sonderzuständigkeiten) arise from the Finanzämter-Zuständigkeitsverordnung (Tax Offices Responsibility Ordinance) (see "Rechtsgrundlage" [legal basis]).