Germany receives tax caution from EU on the discriminatory taxation to foreign charities. The European Commission warns Germany to amend the discriminatory taxation of legacies to foreign charities as the commission observes that it creates an unjustified restriction on the free movement of capital.
An exemption of taxes is available from inheritance tax on domestic charities in Germany. Charities established in other European Union country and the countries under European Economic Area can only enjoy this exemption if the similar reciprocal exemption is also available in those courtiers. The result is the imposition of more frequent tax on charities of German citizens to foreign charities than to German charities. The Commission may refer the case to the European Court of Justice if German does not amend the provision to ensure more equal treatment.
