Charities to get tax breaks in ‘milestone’ for Austria’s third sector

Fundraising Verband Austria (FVA) has welcomed new Government proposals for the third sector, calling them the “biggest reform in 30 years”.

One of the major proposals is to make it possible to get tax relief on donations to education, sport, human rights and animal protection charities.

The Government predicts that donations to organisations in these areas will almost double as a result, and FVA says that it will impact more than one million donors. In the area of education specifically, a recent study cited by FVA suggests that the reforms could help up to 8,000 students to receive additional support.

Donations to certain nonprofits were made tax deductible in the country in 1994, and the list of eligible causes was significantly expanded in 2009. Since 2009, donations to the roughly 6,000 eligible organisations have nearly trebled, reaching €900m in 2022, according to FVA.

However, the organisation has previously warned that the trend of increasing donations was unlikely to continue into 2023, in part due to those inconsistencies on tax deduction eligibility.

The Government’s reform package also removes the cap on tax-deductible donations, which FVA says should make Austria more attractive to philanthropists globally. Other measures will make it easier and quicker for smaller clubs to apply for tax-deductible status.

Outside of tax, the reform improves legal protections for volunteers, and allows them to receive volunteer allowances of up to €1,000 per year.

The reforms were submitted by the Government for a legal review on 12 October 2023.

Günther Lutschinger, managing director of the FVA, says:

“After almost two years of exchanges and consultations with politicians and administration, there is great joy about a package of measures that creates truly first-class conditions for a strong culture of giving, from volunteering to the tax deductibility of donations to the foundation system – this is a milestone for the third sector in Austria.”

Picture by Snapwire via Pexels