What does “non-profit” mean for an association?
For many clubs and organizations, it is vital to be recognized as “non-profit” by the responsible tax office. This status brings with it numerous tax advantages, including exemption from corporate tax and the ability to issue donation receipts. In addition, often only non-profit organizations have access to funding. And those who are proven to be “non-profit” are trusted by donors and enjoy a higher public reputation. For many clubs and associations, the loss of non-profit status therefore threatens their existence.
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GFF clip “Political engagement endangers associations! Briefly explained: Attac ruling and non-profit status” on youtube.com
Why are so many organizations currently losing their non-profit status?
In addition to nationally known organizations such as Attac and Campact, local tax offices have now also withdrawn the non-profit status of smaller, regionally active associations such as the Democratic Center Ludwigsburg. The background to this is the Attac ruling by the Federal Finance Court (BFH) in January 2019. From the BFH’s point of view, the anti-globalization network Attac is not a non-profit organization under tax law because it tries to influence political opinion with its campaigns. Until a temporary decree by the Federal Ministry of Finance in March 2020, numerous tax offices referred to this decision when they examined associations and organizations.
The Attac ruling: A two-class society for associations
The basis for the BFH decision is the catalogue of charitable purposes in the tax code. With the Attac ruling, the BFH has created a kind of two-class society: associations that promote sport, art or culture are allowed to become politically active to promote their purposes, for example by publicly promoting more cultural funding. Associations that promote “the promotion of the democratic state” and “political education”, on the other hand, are not allowed to act with the intention of “influencing political decision-making and public opinion”. This requirement leads to great legal uncertainty in politically engaged civil society. For many organizations, it is difficult to predict whether their work will still be classified as charitable in the future.
„Shrinking Spaces“ in Deutschland
When the scope for action for critical civil society dwindles in countries such as Turkey, Hungary or Russia, the international community speaks of “shrinking spaces”. In Germany, the Attac ruling now limits the opportunities for associations to participate in political opinion-forming. It is a serious blow to democracy when organizations lose their non-profit status because of their political stance or when they no longer express themselves politically because they fear this consequence.
The Basic Law allows associations to participate in the formation of political opinion
According to Article 21 of the Basic Law, civil society organizations have the right to participate in the formation of political opinion alongside political parties. For a vibrant democracy, it is essential that a wide range of actors critically examine existing conditions and take a stand. We are therefore convinced that the current non-profit law must be urgently reformed in order to provide legal certainty for politically active organizations. Democracy needs a strong civil society.
Alliance “Legal certainty for political decision-making” and institutional support
Further information on Attac verdict and to our Demands on the legislator can be found on the Alliance “Legal certainty for political decision-making”of which the GFF is a member.
Our work in this field is supported by the Open Society Foundations.
