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Brussels, 6 April 2011

Taxation: Commission refers The Netherlands to Court over tax discrimination against foreign charities

The European Commission has decided to refer The Netherlands to the EU's Court of Justice because its tax treatment of gifts to charities is discriminatory and in breach of EU rules on the free movement of capital. Dutch tax relief for gifts to charities applies only to donations made to charities registered in The Netherlands and not to donations to foreign charities.

Under Dutch tax law, donations to foreign charity cannot qualify for tax relief unless the foreign charity has registered itself in The Netherlands. In practice, this is liable to discourage Dutch taxpayers from making donations to foreign charities which are not registered in The Netherlands.

The Commission considers that the requirement for foreign charities to register is disproportionate and incompatible with the EU rules on the free movement of capital guaranteed by Article 63 of the Treaty on the Functioning of the European Union and Article 40 of the European Economic Agreement.

In a similar case, the Court of Justice ruled that "nothing prevents the tax authorities of the Member State of taxation from requiring a taxpayer, wishing to obtain the deduction for tax purposes for gifts made for the benefit of bodies established in another Member State, to provide the relevant evidence" (§ 60 of Persche, Case C-318/07 of 27 January 2009).

The Commission sent a reasoned opinion to The Netherlands on 18 March 2010 (IP/10/300).

France is also subject to an infringement case on donations to foreign charities (see IP/09/1764).

For press releases on infringement cases in the taxation or customs field see:

For the latest general information on infringement measures against Member States see:

For more information on EU infringement procedures, see MEMO/11/220

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