🏷️ Non-profit status (§§ 51 ff. AO) and exemption notice (Freistellungsbescheid)

What non-profit status requires, how the tax office checks it and what changed in 2026 on use of funds and sport.

non-profit status Freistellungsbescheid selflessness prompt use of funds Anlage Gem § 55 AO tax office

In brief

An association is non-profit if, under its articles and in its actual work, it selflessly benefits the general public, for example education, sport or civic engagement. The tax office recognises this. You are then exempt from corporation tax and trade tax (not for the taxable commercial activity, § 5 Abs. 1 Nr. 9 Satz 2 KStG) and may issue donation receipts.

Selfless means: members receive no share of profits. Its money must be used for its purposes. As a rule a deadline of two years applies. Small organisations have been exempt since 2021 (initially up to €45,000 income, since 1 January 2026 up to €100,000; § 55 Abs. 1 Nr. 5 AO).

The check takes place in the tax return; in administrative practice usually every three years (no three-year cycle in the law, § 149 AO in conjunction with § 63 Abs. 5 AO).

Step by step

Have the articles checkedModel articles and § 60a AO: the tax office can determine the articles in advance.
File the tax return with Anlage GemIn the corporation tax return the tax office checks whether the articles and activities meet the requirements.
Use funds for the purposeUse income for the purposes in the articles, no excessive remuneration (§ 55 AO).
Keep recordsDocument income and expenditure in a verifiable way.

Deadlines

2 calendar/financial years

Prompt use of funds: at the latest in the two years following receipt.§ 55 Abs. 1 Nr. 5 AO

€100,000

Up to this annual income the duty to use funds promptly does not apply.§ 55 Abs. 1 Nr. 5 AO (as of 2026)

in practice every 3 years

Check of non-profit status via the corporation tax return. Administrative practice, no three-year cycle in the law.Administrative practice; § 149 AO in conjunction with § 63 Abs. 5 AO

Watch out – common mistakes

Excessive remuneration or benefits for members violate selflessness (§ 55 AO).
On dissolution the assets must go to another tax-privileged organisation. The articles must provide for this.
The €100,000 limit refers to annual income. Anyone who exceeds it must use funds promptly.
The "Freistellungsbescheid" (exemption notice) is not applied for separately but follows from the tax assessment. There are two cases on how long it is valid: an exemption notice or annex not older than 5 years; the determination under § 60a Abs. 1 AO not older than 3 calendar years, as long as no exemption notice exists yet (§ 63 Abs. 5 AO).

In depth · legal basis, figures and practice – for advisers and professionals

Requirements

Non-profit organisations are those that benefit the general public selflessly, exclusively and directly (§§ 51 to 57 AO). Selflessness is governed by § 55 AO: funds may be used only for the purposes in the articles, members receive no share of profits, on leaving they get back only paid-in capital contributions, no disproportionately high remuneration, asset lock on dissolution.

Prompt use of funds from 2026

Under § 55 Abs. 1 Nr. 5 AO funds must in principle be used at the latest in the two calendar or financial years following receipt. This rule does not apply to organisations with annual income of no more than €100,000. For small organisations the exemption has applied since 2021 (Jahressteuergesetz 2020) at €45,000, and since 1 January 2026 at €100,000.

New purposes

§ 52 AO expressly names sport, including chess and e-sports.

Procedure

The corporation tax exemption is checked in the assessment procedure (Anlage Gem). The three-year cycle is administrative practice (§ 149 AO in conjunction with § 63 Abs. 5 AO), not laid down in the law. The exemption does not apply to the taxable commercial activity (§ 5 Abs. 1 Nr. 9 Satz 2 KStG). Reliable deadlines can be obtained from the tax office.

Who is responsible

Competent tax office (corporation tax section)
Tax adviser

Quick questions

Worum geht es bei „Non-profit status (§§ 51 ff. AO) and exemption notice (Freistellungsbescheid)“?

What non-profit status requires, how the tax office checks it and what changed in 2026 on use of funds and sport.

Which deadlines and figures matter?

2 calendar/financial years: Prompt use of funds: at the latest in the two years following receipt. (§ 55 Abs. 1 Nr. 5 AO)
€100,000: Up to this annual income the duty to use funds promptly does not apply. (§ 55 Abs. 1 Nr. 5 AO (as of 2026))
in practice every 3 years: Check of non-profit status via the corporation tax return. Administrative practice, no three-year cycle in the law. (Administrative practice; § 149 AO in conjunction with § 63 Abs. 5 AO)

What should I do first?

Have the articles checked: Model articles and § 60a AO: the tax office can determine the articles in advance.
File the tax return with Anlage Gem: In the corporation tax return the tax office checks whether the articles and activities meet the requirements.
Use funds for the purpose: Use income for the purposes in the articles, no excessive remuneration (§ 55 AO).

What do I need to watch out for?

Excessive remuneration or benefits for members violate selflessness (§ 55 AO).
On dissolution the assets must go to another tax-privileged organisation. The articles must provide for this.
The €100,000 limit refers to annual income. Anyone who exceeds it must use funds promptly.

Evidence

AO § 55, gesetze-im-internet.de, retrieved 20 September 2026
AO § 52, gesetze-im-internet.de, retrieved 20 September 2026
AO § 60a, gesetze-im-internet.de, retrieved 20 September 2026
Deutsche Stiftung Engagement und Ehrenamt, "Steueränderungsgesetz 2025", deutsche-stiftung-engagement-und-ehrenamt.de, retrieved 20 September 2026

As of

September 2026 · Sources and method

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