Europe is becoming more and more receptive to cross-border philanthropy. Jérémie Maes, Network Manager at Transnational Giving Europe, looks at both the challenges and opportunities of the current transnational giving environment.
In a borderless world of information and image, cross-border giving has become increasingly important. Being ever more mobile, citizens bring along philanthropy. People have broken the walls of past borders and want to be able to share the positive ideas that philanthropy entails, and the philanthropic means they want to engage. Hence, cross-border philanthropy has become an ever-growing trend.
Yet, despite that growing trend and a non-discrimination requirement in EU law, challenges remain. Both the legal framework and the donation process itself can differ broadly, and there are varied and sometimes complex approaches to the comparability test.
In order to comply with the non-discrimination principle, Member States were supposed to adapt their legislations where necessary to remove all (tax) discriminations against ‘comparable’ foreign EU based PBOs and their donors. Usually it is the competent tax authority which decides on a case by case basis whether a foreign PBO is considered comparable to the domestic one.
Complex and long procedures, together with high costs can hinder cross-border giving when donations or legacies need to be recognised or agreed in another EU country. Meanwhile, the issue of registering a charity abroad, let alone the costs for legal advice, is an administrative burden and time consuming.
However, some of the European Court of Justice cases (eg. The Stauffer Case, The Persche Case and The Missionswerk Case) and infringement procedures against EU members not aligned with those court cases serve as a beacon of hope in the European sky. Those court cases are a sign that it is legally right to foster cross-border giving. Even though some countries do not comply yet.
On the other hand and very notably, some donors already give across borders and claim tax relief in their home nations, unafraid of disputes with their fiscal administrations as they feel fully entitled to do so, according to their fundamental freedoms. They are in some form paving the way.
The challenges may seem overwhelming, and Brexit might have given you a punch in the stomach if you are a cross-border believer, or user. However, there is no place for despair. Change brings opportunities, and opportunities bring change.
A 2014 study from the European Foundation Centre and Transnational Giving Europe explored commonality around the national tax laws in the context of cross-border giving. The actual political environment could very well be the push needed to see more European integration and national tax convergence. This sought commonality would indeed be the perfect environment for cross-border giving.
And here at TGE, we are seeing growth in cross-border gifts. Our role is to help EU donors and beneficiaries in 19 countries make and receive their gifts in an efficient and secure way, despite the variety of legal practices and other practical issues. And yet, our goal is that we will grow and enable philanthropy and the necessary cross-border structures so that there will be a time when our services are no longer required.
A big momentum will be reached in May 2017 with an important event open to all, at the European Institutions, to boost (cross-border) philanthropy in Europe. Stay tuned.
 “Taxation of Cross-Border Philanthropy in Europe after Persche and Stauffer: From landlock to free movement?”, Thomas von Hippel, EFC, 2014, page 8.
About Jérémie Maes
Jérémie is the Network Manager of Transnational Giving Europe - a network of philanthropic institutions collaborating internationally to foster charitable giving within 19 European countries. He also works with the King Baudouin Foundation, after spending his traineeship at the Ministry of Foreign Affairs in the EU Trade Policy Department.