Frankfurt The war in Ukraine is destroying towns and villages, bringing death and displacement. As a result, more than a million Ukrainians have now fled to Germany. The willingness of the Germans to help is great. It ranges from donations to personal help.
In the first few months of the war in particular, communities, schools and kindergartens even organized private donations in kind for medicines, hygiene items, household items and non-perishable food. Other people donated money to institutions such as the German Red Cross or transferred amounts directly to Ukrainian institutions such as hospitals or private individuals who remained in the crisis area. Some Germans even took in Ukrainian refugees in their homes and apartments.
At least part of the aid can be declared in the 2022 tax return. But be careful: Because Ukraine is not a member of the EU, restrictions apply. The Handelsblatt provides an overview of how you can deduct donations to Ukraine from taxes, which support the tax authorities reward with tax and which taxation rules are temporarily suspended.
Deducting donations from taxes: What applies?
In principle, donations can be deducted as special expenses in the tax return. As soon as the total special expenses (which also include pension expenses) exceed the flat rate of 36 euros per year, they reduce the taxable income and thus the tax burden.
It is irrelevant whether it is a monetary donation or a donation in kind. “If you want to deduct a donation in kind from tax, you need a donation receipt,” explains the United Tax Aid Association (VLH). Proof must include the exact description of the item being donated, its age, condition, original purchase price, value and date of donation.
For a donation to be recognized as a special expense, it must be made to a “tax-deferred recipient.” These are usually non-profit or charitable associations or foundations, but also cities and communities. These must be based in Germany or the EU. “Donations made directly to organizations based in Ukraine are not deductible under German law,” explains the Federal Ministry of Finance (BMF). The help must therefore come from an organization such as the German Red Cross, Unicef or a city and municipality in Germany be collected, which then becomes active in the Ukraine or helps those arriving in Germany.
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The “tax-privileged recipients” issue a donation receipt for the amount of the donation. Simplified proof applies to donations of up to 300 euros, i.e. a cash payment slip, an account statement or a printout from online banking is sufficient.
For donations related to Ukraine, the simplified proof as well, for unlimited donations.
Ukraine donations to individuals and institutions
Just a few days after the outbreak of war, private individuals collected donations in kind, which they took to the Ukrainian border themselves. Others sent aid packages to Ukraine on their own initiative. To this day, Deutsche Post is still transporting such parcels to the crisis region free of charge. However, the tax authorities do not recognize these expenses as tax-reducing.
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Donations that are transferred directly to a Ukrainian hospital or other institution cannot be claimed either.
The Treasury does not usually take financial aid to private individuals from Ukraine into account either. The only exception: you are legally obliged to support a person who has fled Ukraine and has little income and assets. This includes parents, grandparents or children who are not entitled to child benefit, but not siblings, aunts and uncles. In these cases, you can use your actual expenses in 2022 up to 10,347 euros (maximum amount in 2022) for each supported person as extraordinary burden assert.
No tax disadvantages due to the provision of housing
Some Germans temporarily took in Ukrainian refugees in their houses or apartments. If you don’t charge rent, you don’t have any income. “The tax office will not use any ‘fictitious’ rental income,” the BMF clarified.
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Anyone who lets someone rent an apartment or holiday home free of charge or at a reduced price, which they actually want to rent out regularly, is usually canceled or reduced by the tax office Business expense deduction. “However, a temporary free provision of an apartment to war refugees from Ukraine in 2022 and 2023 does not lead to a reduction in the income-related expenses deduction,” explains the BMF.
In some cases, the competent authorities reimburse a flat rate for the private accommodation of Ukraine war refugees in an apartment they use themselves. According to the Federal Ministry of Finance, taxpayers do not have to state this flat rate as other income in the 2022 tax return. This only applies as long as the flat rate does not exceed the average accommodation costs.
When your property is further exempt from tax
If you want to sell your house or apartment, you have to meet certain deadlines in order not to be liable for tax. Here, too, the legislature has made a goodwill arrangement if Ukrainian refugees live in the property in the meantime.
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Inherited or donated family homes are exempt from inheritance or gift tax if the heir or recipient has lived in the property for at least ten years. According to the Federal Ministry of Finance, the tax exemption does not change if refugees are temporarily taken in free of charge or against reimbursement of ancillary costs. This applies as long as the taxpayer continues to partially use the apartment for his own residential purposes.
The resale of a private property is considered a private sale transaction. The profit must be taxed at the personal income tax rate if there are less than ten years between purchase and sale.
There is an exception if the owner lived in the property at least in the year of the sale and in the two previous years. “The free provision of living space to war refugees from Ukraine will be assessed as such use for their own living purposes in 2022 and 2023,” explains the BMF.
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First publication: 03/23/2023, 5:59 p.m.