Austrian VwGH on Tax Deductibility of Donations

May 23, 2025 Benn-Ibler Rechtsanwälte

According to Section 18(8)(1) of the Austrian Income Tax Act (Einkommenssteuergesetz, hereinafter EStG), donations are only eligible for tax deductions if the taxpayer’s personal data is disclosed to the recipient of the donation. Additionally, the recipient is required to forward this information, along with the total amount of all donations made by the taxpayer during the calendar year, to their tax office.

In the case at hand, the appellant claimed a cash donation made to a nonprofit organisation as a special expense in his employee tax return. However, the tax office did not take the donation into account when calculating his income tax.

In the appeal against his income tax assessment, the appellant acknowledged that he had not provided the donation recipient with all the information specified in Section 18(8)(1) of the EStG, nor had he transferred any data in accordance with Section 18(8)(2) of the EStG. However, he argued that the monetary donation should be considered a one-time expense because Section 18(8) of the 1988 EStG was inapplicable due to the precedence of the General Data Protection Regulation (GDPR), which is unconstitutional.

Without issuing a preliminary appeal decision, the tax office referred the appeal to the Austrian Bundesfinanzgericht (Federal Finance Court, hereinafter BFG), which dismissed the appeal.

The Austrian Constitutional Court (Verfassungsgerichtshof, VfGH) refused to hear an appeal against the BFG’s decision. The Austrian Administrative Court (Verwaltungsgerichtshof, hereinafter VwGH) dismissed the appeal as well, considering it as unfounded, as follows:

The VfGH explained that collecting taxes and duties is a matter of considerable public interest. Accurate tax bases are essential for determining taxes and ensuring uniform taxation. The basis for income tax assessment is taxable income.

According to Section 18(8) of the EStG, an encrypted, area-specific personal identification number must be transmitted. This number is necessary for allocating allowances as special expenses to specific taxpayers. The data processing outlined in Section 18(8) of the EStG is proportionate and does not violate the data minimization principle standardized in the GDPR.

VwGH Ro 2022/15/0018 (19 December 2024)