Donations to organisations designated as ANBIs are tax-deductible for income tax purposes. Waiving the allowances to which a volunteer is entitled in connection with work carried out for an ANBI may also result in tax-deductible donations. In our article Volunteering as a tax-deductible donation We outline the conditions you must meet.
A membership fee is not a donation
A donation is a contribution made out of generosity; the donor expects nothing in return. A member of an association does not pay their membership fee out of generosity, but expects, in return for the fee, to be allowed to take part in the association’s activities. Even if the member does not actually take part in the association’s activities, the membership fee does not qualify as a donation. After all, the member has the opportunity to take part.
Waiver of membership fees
The former treasurer of a singing and dancing ensemble pays €600 in membership fees for himself and his wife. As a cultural organisation, the ensemble has ANBI status. In view of the services provided by the member to the association (including supporting the new treasurer) and the financial results achieved as a result, the board has exempted the member from paying membership fees. The member states that he will donate the membership fees already paid to the ensemble and will claim the amount of €600, plus €150 (the surcharge for a donation to a cultural ANBI), as a tax-deductible donation against his income.
The Tax and Customs Administration refuses to allow the deduction on the grounds that membership fees are not a deductible donation because they are provided in return for a service. Court of Appeal of The Hague However, it ruled that, as a result of the exemption from membership fees, the member had a right of claim against the association. There is no consideration in return for waiving this right of claim, and so this does constitute a gift.
The Court therefore allows the deduction as a donation. It is irrelevant that no cash cycle took place. Had a cash cycle taken place, the association would have refunded the waived membership fee. The member would then have paid the amount back to the association as a donation. The Court finds that both obligations have been fulfilled by way of set-off.