AG favours giving

Advocate General Mengozzi has given his opinion on tax relief in the light of the case of Hein Persche v Finanzamt Lüdenscheid, which concerns a donation from a German national to a charitable organisation in Portugal. Mengozzi stated this week that the court should allow the same tax advantages for cross-border donations as for donations to domestic organisations.

Dominic Lawrance, solicitor at Macfarlanes LLP, says: “It is the norm within Europe for tax legislation to limit the availability of tax reliefs on gifts to charity, so that such reliefs are only available if the charity is situated in the same country as the donor”.

Lawrance suggests that if in Persche, the European Court of Justice agrees with the opinion of the advocate general, it will have major implications for tax regimes across Europe. “If the European Court of Justice follows his opinion, this will represent a dramatic liberalisation of the tax regime—the fall of the iron curtain that has, up to now, divided each member state from its neighbours, where charitable giving is concerned,” he adds.