Personal Finance & Money Asked on March 10, 2021
I’m (being a resident of Germany) going to introduce a software foundation – keep in mind though that I’m using term "software foundation" in a non-legal sense; and actually the goal of this question would be to figure out what would be correct form of organization.
The idea behind this foundation is to survive on donations, both corporate and personal, and deliver open-source solutions, most of which would be free (that is, some still will exist as a paid software but will be always open-source – so one can just compile distrib by themselves).
The question is – is there any specific form of organization I can choose and register as to minify tax expenses? I do realize that why you are making money on some of products it’s a commercial activity.
Still, many of them will be non-profit by design – and if I’ll have like 40% in taxes for donations – well, it will be sad.
Nothing. SImple like that. It is not your form - in order for any donation to NOT be taxed, one of two elements must be in fact:
One, you are writing an invoice and the invoice is tax deductable. I.e. if a company donates to you for consulting. Private people are VERY VERY VERY limited on what is tax dedutable. Companies - particularly using open source - would be in a much better place for a sponsorship. Heck, you could write the expenses off as marketing if you do proper sponsoring. YOUR legal form is quite irrelevant then. But any non company - nope, no deduction.
Two, you are a non profit setup with LEGAL ACCEPTANCE - then your invoices are tax deductable ALSO for private people. This is not so much about legal form but about a check that you are there for the greater good in a VERY narrow definition which I am VERY sure you are not fulfilling.
There is not a lot more you can do. If people decide to donate their post tax money for whatever, the government is not reducing their tax burden. Hobbies are not tax deductible. YOU definitely can not choose anything to reduce a THIRD PARTY tax burden without going through the way to become a "Gemeinnützige Organisation"
A reference for that is here:
or here:
https://de.wikipedia.org/wiki/Gemeinn%C3%BCtzigkeit
Either you fulfill those steps, or - yeah, no way. And for businesses go the way or marketing.
Answered by TomTom on March 10, 2021
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