Sep 2009 | Belgian Tax Authorites defeated in cross border charitable donation case

The Great Ormond Street Hospital Children's Charity has won a key court case regarding taxation of cross-border  donations. The victory means the charity only has to pay 8.8 per cent tax on a Belgian benefactor's GBP1.1 million donation, instead of the 80 per cent charge that the Belgian tax authorities tried to impose. The Charity was left a legacy worth about €1.2m from a Belgian resident in 1996. The Belgian government ruled that, because the charity was not Belgian, the tax on the donation should be 80 per cent rather than the 8.8 per cent rate afforded to domestic not-for-profit organisations. However, a Brussels court ruled this month that the charity should have been charged the 8.8 per cent rate.
The case comes after a legal victory last year for a German donor, Hein Persche, who won tax relief on a donation to a Portuguese charity, see Persche case. The case sets an important precedent for recognition of the British and Irish charity models, which are different from the legal structures used by continental organisations.
The case should now result in much more frequent cross-border donations within the EU.


Aileen Keogan | Solicitor & Tax Consultant | 21 The Avenue | Louisa Valley | Leixlip | Co. Kildare | Ireland

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