Full text: Taxation of foundations in Europe

trian law. The foundation deed must include some minimum information such as the endow-
ment of the foundation with assets, the purpose of the foundation, the name of the founder, 
the beneficiaries, the name of the private foundation, its registered seat and the period for 
which it is established. The foundation deed has to be deposited with the Company Register 
and is accessible to the public. In many cases, the foundation deed is supplemented by a so-
called appendix to the foundation deed (Stiftungszusatzurkunde) which is not accessible to 
the public and may contain more detailed information on the above-mentioned points, or ad-
ditional rules. A foundation can be established for a definite or an indefinite period of time. 
Private foundations whose main purpose is the provisioning of natural persons can be set up 
for a maximum period of time of 100 years; however, the ultimate beneficiaries may decide to 
extend this period by another 100 years. The bodies which are entrusted with pursuing the 
purpose of the foundation are the Board of Directors (Stiftungsvorstand), the Auditor of the 
Foundation (Stiftungsprüfer) and, in specific cases, the Supervisory Board (Aufsichtsrat).3. 
Moreover, the founder may determine additional bodies for the protection of the foundation 
purpose. The responsibility of the Board of Directors is the external representation of the pri-
vate foundation and, at the internal level, its management. In the exercise of its duties, the 
Board of Directors has to ensure that the purpose of the foundation is observed. The Board 
of Directors also has to keep the books of the private foundation. In this context, the provi-
sions of the Company Law (Unternehmensgesetzbuch, UGB) have to be observed. More-
over, the report on the situation of the foundation must include information on the progress 
made in the pursuit of the foundation purpose. The Foundation Auditor has to audit the an-
nual accounts including the report on the situation of the private foundation. An auditor’s re-
port is required by law. The publication of the annual accounts, however, is not mandatory. 
The foundation documents also have to set forth how the distributions to the beneficiaries are 
to be effected. The Board of Directors has to ensure the implementation of these documents. 
2.2. Tax Treatment of Private Foundations 
As a legal person, a private foundation is in principle subject to corporate income tax. The 
fiscal treatment of payments to the beneficiaries is governed by income tax law. While the 
fiscal treatment of private foundations is governed by both corporate tax law and income tax 
law, a great number of special provisions exist. This situation ultimately results in a special 
tax status for the private foundation which entails considerable advantages. Moreover, there 
are special rules for endowments to private foundations which need to be considered, too. In 
the following, we want to describe the fiscal impact of donations to private foundations and 
explain what the regular taxation looks like at the level of both the private foundation and the 
3 A supervisory board has to be appointed if the private foundation employs more than 300 staff or if the number of employees 
with companies and cooperatives domiciled in Austria in which the private foundation has a substantial shareholding exceeds 
300. Details are governed by Article 22 Private Foundation Act.

Note to user

Dear user,

In response to current developments in the web technology used by the Goobi viewer, the software no longer supports your browser.

Please use one of the following browsers to display this page correctly.

Thank you.