The abbreviation ANBI refers to the Ageneral Nut Beighteen IOrganisation. An organisation with ANBI status is fully exempt from inheritance and gift tax. Donations and gifts to an ANBI may be tax-deductible for the donor.
ANBI conditions
In order to be eligible for these benefits, an institution must meet a substantial set of conditions. These conditions have been deliberately formulated in broad terms by the legislator (one might also describe them as “somewhat vague”). This allows the interpretation of the conditions to adapt easily to changes in society.
The logical consequence is that the (tax) court must be consulted to determine the current social interpretation of the open-ended provisions. On 6 July 2018, the Supreme Court ruling A ruling has been handed down in a case concerning a number of the criteria for the ANBI regime. This naturally relates to a situation in which the Tax and Customs Administration has withdrawn ANBI status. The Tax and Customs Administration bases this decision primarily on the assertion that the ANBI’s records are inadequate and that it is not sufficiently clear for what purpose the ANBI holds its financial reserves.
Administration
The ANBI in question is involved in providing medical assistance, care for disabled people and orphans, and support for widows in developing countries. According to the Tax and Customs Administration, the ANBI’s records did not provide sufficient insight to determine whether its actual activities meet the ANBI conditions.
The Supreme Court has ruled that it is not necessary for receipts and invoices for all purchases and expenditure to be included in the accounts at all times. In this regard, the location where the actual work takes place must also be taken into account. The ANBI operated, amongst other places, in a war zone (Syria).
Financial reserve (not to be hoarded)
An ANBI must state in its financial records the purpose for which it holds assets and justify the size of those assets. It is not permitted to hoard assets; they must actually be used for the ANBI’s actual activities.
According to the Supreme Court, an ANBI need only demonstrate to a sufficient degree that it is not hoarding assets. This does not need to be reflected in the financial records. The management of the assets must be evident from the ANBI’s policy plan. The Supreme Court considers screenshots of the ANBI’s website to be sufficient proof of this.
Charitable donations at a reduced rate
One aspect of the 2019 Tax Plans is that, from 2021, the personal allowance will no longer be deducted at the highest rate for income tax purposes. The deduction for charitable donations forms part of the personal allowance. If, in 2018, your income from employment and property (Box 1) amounts to €68,507 or more, you can deduct eligible charitable donations at a rate of 51.95%. If you make the same donations in 2021, you will deduct them at a rate of just 37.05%. The charitable sector in the Netherlands has already expressed fears that this measure will reduce people’s willingness to make donations.
The charitable donation allowance is also used to fund, for example, the construction of (artificial turf) sports pitches by (sports) clubs. This is because regular donations to clubs are also deductible from income in box 1. Here too, the tax benefit is set to be slightly reduced, which may result in donors being less willing to contribute.