Full text: Taxation of foundations in Europe

For example, the government supervisory authority may annul a resolution taken by the 
founder in its capacity as foundation body if this resolution contravenes the original founda-
tion purpose. As a matter of nature, in such cases, the authority has to examine whether its 
measure is consistent with the principle of proportionality. 
4.2. Tax Treatment 
4.2.1. Private Utility Foundations 
Foundations that do not serve a public utility purpose do not benefit from any tax advan-
Tax Treatment of Foundation Endowments 
? At the level of the Foundation 
If a foundation is established causa mortis, inheritance tax applies to endowments; if it is set 
up inter vivos, gift tax is levied. These endowments are subject to taxation in the unfavour-
able tax class III. 
The only exception to this rule is the family foundation. Here, the income of the foundation is 
considered as income of the beneficiaries for tax purposes. As a result, the foundation in-
come may be attributed to tax class I. This favourable treatment does not apply to later dona-
tions to the foundation, which are subject to the unfavourable tax class III. 
Inheritance and/or gift tax are levied on the basis of the following tax rates: 
Endowments up to and including 
(amounts in Euro)  
Tax class I
Tax class II
Tax class III
52,000  7 12 17 
256,000 11 17 23 
512,000 15 22 29 
5,113,000 19 27 35 
12,789,000 23 32 41 
25,565,000 27 37 47 
above 25,565,000 30 40 50

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