The European Foundation Proposal: A Shift in the EU Tax Treatment of Charities?

Sigrid Hemels, SA Stevens

Research output: Contribution to journalArticleAcademicpeer-review


On 8 February 2012 the European Commission proposed a Statute for a European Foundation. In this article the Proposal is discussed in the broader context of government support for foundations in the European framework. Therefore, before the Proposal is discussed, the position of foundations in Europe and their role in the Member States’ welfare states is briefly analysed. FEs situated in another Member State must be entitled to the same tax treatment as resident foundations. The authors briefly discuss the European case-law with regard to charities and donors. This review is necessary to investigate in what way the Proposal deviates from the current case-law and what the possible implications are for charities, donors and the policy of Member States. The authors conclude that the Proposal for a European Foundation could enhance the cross-border development of charities within the EU and help building a European civil society. Case-law leaves much room for Member States to regulate the tax laws for charities in a non-discriminatory way. The Proposal restricts the autonomy of Member States to define the concept of public benefit. Furthermore, Member States cannot supervise FEs registered in other Member States. The FE might become a vehicle for abuse of tax incentives for charitable giving. In that case, it would be a step back for the European civil society.
Original languageEnglish
Pages (from-to)293-308
Number of pages16
JournalEC Tax Review
Issue number6
Publication statusPublished - 2012


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