Your donation to The Foundation for Peace would be very welcome to further its objects. As regards taxation, your donation will qualify for tax relief in situations as explained below.

Whether tax relief is available depends on your personal residence.

Residents of the Netherlands
If you qualify as a Dutch resident taxpayer for Personal Income Tax purposes, two main forms of tax relief are available, which are explained below.

1. Donations in cash

Your donation qualifies for tax deduction insofar as that donation to The Foundation for Peace (together with other donations by you and your spouse/partner for tax purposes) exceeds a threshold of 1% (but at least 60 euro) of relevant taxable income (together with that of your spouse/partner), but at maximum 10% of that relevant taxable income. Relevant taxable income is the total of taxable income in boxes 1, 2 and 3 before deduction of personal deductible items (“persoonsgebonden aftrek”).

(Kindly note that you may be required to prove your deduction for example by a copy of the relevant bank transfer.)

The deductible part of your donation may form an interesting tax shelter, depending on the marginal tax rate you are paying, thus depending on your taxable income. Dutch marginal rates typically vary from 33,4% to 52%.

Example:
If your taxable income in boxes 1, 2 and 3 amounts to €55,000, the tax shelter for a gift of €1,000 may be calculated as follows. If there are no personal deductions and your partner does not earn any income, the threshold amounts to 1% of €55,000 = €550. You may therefore deduct €1,000 less 550 = €450 from taxable income.

As your marginal tax rate in this case is 52%, your tax shelter amounts to 52% of € 450 euro = €234 euro. In other words, by donating €1,000 you have surrendered only €766 of your net available income.

2. Periodic donations

You may consider to increase your donation without surrendering extra net money. This may be done by laying down a fixed annual donation in a notarial deed, with a term of at least five years. For such periodic donations, neither the deduction threshold nor maximum applies. Thus the full amount of the donation is deductible in the relevant calendar year. Of course, The Foundation for Peace would be most pleased with your contribution to its continuity by such annually repeated donations.

(Kindly note that you may be required to prove your deduction for example by a copy of said notarial deed.)

If you lay down the donation in the above example in a notarial deed for a term of five years, you can increase your donation without surrendering more net available income. The tax shelter of the above €1,000 now amounts to €520. You may therefore consider raising your annual donation to: €766 divided by 52% = €1.473 annually, without surrendering more than €766 euro of net available income.

If you would like The Foundation for Peace to assist you with the above periodic donation, you are welcome to contact the Foundation’s Office.

3. Gift tax in the hands of the Foundation

For completeness’ sake, your donation will be taxable with Dutch gift tax at a flat rate of 11% (exceeding 4,243 euro per two years) in the hands of the Foundation. However, donations are only taxable with Dutch gift tax if donated by a Dutch resident or fictitiously resident person. Therefore, the Foundation would be grateful if you would advise its Office in case you do not qualify as a resident for Dutch gift tax purposes, or in case the source is outside The Netherlands while you qualify as a resident.

By ruling of January 8, 2004, it was declared that the Foundation for Peace fulfills the conditions laid down in article 24, paragraph 4, 1956 Dutch Gift and Inheritance Tax Act. A copy of the ruling may be obtained from the Foundation’s office.
The examples on tax consequences are based on the rates applicable for 2004.

Dutch relief while resident in other countries
In cases which may be exceptional but not rare, you may qualify for Dutch tax deduction of your donation if you are a non-Dutch resident. This is typically the case if:

• You are a resident of an EU Member State or a country which has concluded a tax treaty with The Netherlands;
• You are earning Dutch taxable income;
• You choose to be treated as if you were a Dutch resident taxpayer (so-called fictitious resident for Personal Income Tax purposes).

If you think this describes your situation, you are welcome to contact the Foundation’s Office for basic tax assistance.

Resident in the United Kingdom
(arrangement under construction)

Resident in Germany
(arrangement under construction)