Full text: Taxation of foundations in Europe

purposes if certain conditions are met. In this case, the foundation must comply with the 
regulations on certification and pursue its activity without the aim of making profit; moreover, 
the dividends must be directly assigned to the certificate holders based on the size of their 
Application of corporate taxation 
In the case of extensive commercial activity of the foundation, its income may be subject to 
corporate tax of 33.99% applicable to domestic companies. 
Dividends held in the foundation assets in the framework of the activity of securities certifica-
tion are not included in the tax assessment base as these are directly attributed to the certifi-
cate holders in accordance with the principal of fiscal transparency. In this case, the issuer of 
the certificates pays the final withholding tax at source levied on the dividends directly to the 
tax authorities. 
For certificate holders, the income from the disposal of certificates is tax-exempt (in the case 
of companies). The same applies to private persons; however, under certain conditions, their 
income from the disposal of certificates may be subject to taxation under the category of 
“Miscellaneous income”.  
Income from certificates is considered as dividends at the level of a company; as a result of 
arrangements for parent and subsidiary companies, it is tax-exempt to the extent of 95%. 
3.2.3. Dissolution 
Dissolution of a foundation occurs upon application by a founder or its legal successor, the 
managing director, the public prosecutor’s office in accordance with Article 39 Association 
and Foundation Act after a court decision, regardless of whether or not the termination was 
originally provided for upon expiration of a period of time or occurrence of certain circum-
stances (e.g. fulfilment of the purpose). 19. 
The dissolution occurs when the conditions defined in the statutes are met or through court 
decision if the foundation is no longer able to perform its activities. The court appoints liqui-
dators to distribute the assets. If this is not possible, the government is responsible for under-
taking a distribution that comes closest to the original purpose of the foundation. However, 
the statutes should contain a provision which precisely defines the proceedings in the event 
of dissolution. 
18 Cf. ibid, p. 697. 
19 Cf. ibid, p. 692 et seq.

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