Russia’s war against Ukraine has continued for almost a year since it began. The Federal Ministry of Finance (BMF) published administrative instructions for tax relief to support victims of the war. These administrative instructions have meanwhile been extended until 31 December 2023.
The administrative instructions contained herein are also relevant for charitable organisations in particular.
Extensions until 31 December 2023
With its guidance dated 17 November 2022 1, the BMF has extended the temporal scope of application of the tax measures to support the victims of the war in Ukraine to 31 December 2023.
This means an extension of the BMF guidance dated 17 March 2022 (tax support measures) 2 and its supplementary letter dated 7 June 2022 (wage tax support measures) 3. The BMF’s frequently asked questions (FAQs) on the tax measures to support those who are victims of the war against Ukraine were also updated on 20 December. With BMF guidance dated 11 November 2022 4, BMF guidance dated 31 March 2022 (accommodation of war refugees from Ukraine by housing cooperatives and housing associations) 5 was extended until 31 December 2023.
PD Dr. Thorsten Helm
Partner, Tax
KPMG AG Wirtschaftsprüfungsgesellschaft
Overview
Tax relief
In terms of content, there are three essential BMF guidances that deal with tax relief for the support of victims of the war against Ukraine. Further BMF guidances deal with the extension of the measures until 31 December 2023.
BMF guidances dated 17 March 2022 and 31 March 2022
The Federal Ministry of Finance (BMF) published initial administrative instructions on 17 March 2022. These are intended to allow for the tax recognition of the overall commitment of society as a whole in the course of supporting those victims of the war against Ukraine.
Support measures and fundraising of tax-privileged institutions as well as commitment by companies and citizens are to be promoted. The administrative instructions of the BMF provide for relief with proof of donation, wage donation and use of funds.
In addition, on 31 March 2022, the BMF published a guidance on the accommodation of war refugees from Ukraine by housing cooperatives and housing associations within the meaning of § 5 para. 1 no. 10 of the Corporation Tax Act (KStG).
A detailed description of the contents of the BMF guidances can be found here.
BMF guidance dated 7 June 2022 - supplement to the guidance dated 17 March 2022 with wage tax support measures
Aids and support from the employer to its employees can be tax-exempt in accordance with wage tax guidelines (R 3.11). BMF guidance dated 7 June 2022 explains to what extent aid and support granted to employees who are victims of the war in Ukraine are tax-exempt. In addition, there are further explanations on wage donation. A waiver of wages caused by this is not included in the determination of the taxable wage and therefore has a tax-reducing effect within the framework of wage tax.
The co-author of the article is Christian Bischoff, Assistant Manager, Lawyer/In-house lawyer, KPMG AG Wirtschaftsprüfungsgesellschaft.
1: BMF guidance dated 17/11/2022 - IV C 4 - S 2223/19/10003:018, DB 2022 p. 2832.
2: BMF guidance dated 17/03/2022 - IV C 4 - S 2223/19/10003:013, BStBl. 2022 I p. 330
3: BMF guidance dated 07/06/2022 - IV C 4 - S 2223/19/10003:017, BStBl. 2022 I p. 923
4: BMF guidance dated 11/11/2022 - IV C 2 - S 1900/22/10045:001.
5: BMF guidance dated 31/03/2022 - IV C 2 - S 1900/22/10045, BStBl. 2022 I p. 345