International comparisons
Regulations favourable to the development of foundations
The law of 1 August 2003 simplified the system of patronage, notably by making the status of foundations recognized as being of public utility more flexible. It is no longer compulsory to allocate the necessary capital as soon as the foundation is set up and it is sufficient to commit to multi annual funding. In addition, a company foundation can now receive donations from the employees of the founding company. All these provisions resulted in a doubling of the creation of foundations between 2003 and 2008.
Country | Foundation creation | Taxation |
---|---|---|
Germany | - Creation subject to simple recognition | - Public bodies are exempt from corporation tax |
Belgium | - Creation subject to authorisation only for foundations of public utility | - No tax on income from gainful activities as long as gainful activity is marginal |
Spain | Prior administrative authorisation was abolished in 2002 | - Income from real estate or movable property and income from economic activities indissolubly linked to the social object of the organization (e.g. entry fees) or marginal are exempt from tax. |
France | - creation subject to authorisation | - Foundations recognized as being in the public interest whose management is disinterested are exempt from corporation tax, whose nonprofit activities remain predominant and whose revenue from gainful activities does not exceed EUR 60,000 per year. |
Luxembourg | - Creation subject to authorisation | The gainful activity is subject to corporation tax (about 30% depending on the municipality) |
United Kingdom | - Creation not subject to authorisation: registration with the Charity Commission (no right of refusal if the criteria are met) | - The commercial income of philanthropic organizations is not taxable if it is related to the purpose of the organization, if it is generated by the work of the beneficiaries of the organization’s activity or if its amount remains marginal - Donations and bequests made to philanthropic organizations are exempt unless they are not final or the property transferred is used for a purpose not provided for in the articles. |