Volltext: Taxation of foundations in Europe

12 The founder has no influence on the administration of the assets nor a share in the founda- tion assets, but receives a right of (co-)determination. Provisions can also be made to ensure that after achievement of the foundation purpose, part or all of the total assets go back to the founder(s). In accordance with Article 28 of the Association and Foundation Act, the private foundation must have its registered seat in Belgium. If the registered seat is moved abroad, this automatically results in the foundation being wound up if the legal system of the country into which the foundation’s registered seat is to be moved does permit such a transfer. The deposit of assets with the foundation is considered a gift if no or only minor considera- tion is given. In this context, it has to be noted that under the law of succession, gifts may have considerable consequences with regard to the bequest. The foundation’s statutes must already contain provisions for the use of the foundation as- sets upon dissolution. In any case, the assets must serve a purpose which is not related to personal interest. In case that the donor is to receive the originally endowed asset upon achievement of the purpose, this must also be stated in the foundation statutes. Disclosure Requirements In general, the strict reporting requirements in accordance with Article 32 Association and Foundation Act must be adhered to. The obligation to keep books and to prepare annual financial statements depends on the size of the foundation. If two of the following thresholds are exceeded, the strict regulations with regard to accountability and control mechanisms are applicable: ? Annual average of 5 employees ? total income of more than EUR 25,000 ? Assets according to annual financial statement of more than EUR 1,000,000 Foundations that do not meet these requirements are subject to a simplified system. Private foundations with an income of or exceeding EUR 25,000 must deposit their balance sheets with the Belgian national bank11. Types of Foundations ? Foundations of public utility (instelling van openbaar nut) This is the oldest form of foundation. It distinguishes itself from the private foundation in par- ticular through its goal of pursuing a philanthropic, philosophical, religious, scientific, artistic, educational or cultural purpose. While supervision of public utility foundations is not obliga- tory, the tax authorities make inquiries into the nature of the non-profit activities and dona- 11 Cf. Kocks (2007), p. 687 et seq.

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