Why specialised tax services are needed in the public sector

  • Public, church and public-benefit organisations have special tax status owing to the services they provide to society.
  • Specific laws and various responsibilities on organisations have to be harmonised with tax law.
  • Consulting the law is not always enough; it is necessary to have extensive practical experience to provide bespoke solutions.
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“We understand the challenges of the public sector and non-profit organisations and give them consistent support with their special tax status. That’s what we’re specialised in.”
Silvia Michel Partner, Head of Public Sector

What makes tax in the public sector particular

The public sector, not-for-profit and church organisations are taxed differently from private companies. And rightly so, since the whole of society profits from their labour. But at the same time, components of them may be treated as commercial enterprises. 

The organisations’ individual responsibilities have to be assessed according to the various tax laws and the correct taxation ensured in the administrative processes. 

For example, legal persons under public law are now more frequently classified as commercial under Section 2b of the VAT Act than they used to be. Questions of competition are also leading to the taxable areas of not-for-profit organisations being expanded. Not every use of buildings by a non-profit is exempt from property tax. We know the particular features here and have many years of experience in advising the public sector, not-for-profit and church organisations. 

Particularly in a changing environment, tax matters in the public sector can be complex and even difficult for the tax authorities to apply. Our experts will be happy to render assistance. We’d be happy to hear from you. We advise:

  • federal and state government bodies, local government,
  • public bodies and entities
  • churches
  • public-benefit, non-for-profit organisations and NGOs
  • and companies owned by the above organisations.

Do you have any questions or need help in communicating with the tax authorities? Please feel free to contact us.

Grant Thornton’s services

Our range of services includes all the areas of tax of public, non-for-profit and church organisations. For many types of tax, our clients are only liable in certain components. Nevertheless, they must make sure they file their declaration on time, correctly and completely. That’s why preparing and submitting returns on time is just as much a part of our services as assisting with adapting business processes, assisting with tax audits and appeals, or implementing a tax control framework.

We advise our clients on:

  • VAT, including Section 2b of the VAT Act for legal persons under public law
  • asset management, jurisdiction and commercial operations of public law entities in VAT and income tax
  • in all areas of not-for-profit law
  • tax plans for tax-privileged organisations, incl. coordination with the tax authorities
  • by-laws for non-for-profit organisations according to the German Fiscal Code [Abgabenordnung – AO]
  • VAT on purchases abroad
  • property tax, real property transfer tax, and particularly on the specific exemption conditions
  • building tax deductions, including withholding taxes
  • payroll tax, social insurance, social insurance contribution for artists and
  • tax control frameworks

and we offer training on the above topics.

We’ll assist you with:

  • tax reports and applications
  • advance VAT returns and annual returns, with partial VAT liability, incl. calculation of the VAT key
  • Calculation of profit for commercial operations and economic activities
  • VAT taxation of the agricultural and forestry operations of legal persons under public law
  • 4-sphere invoices for tax-privileged organisations
  • E-balance sheets
  • Corporate income tax returns
  • Trade tax returns
  • Capital gains tax advance notifications, tax certificates
  • Real estate value declarations
  • Audits and tax audits
  • Defence advice and
  • court and out-of-court appeals.
Silvia Michel
Get in touch
Silvia Michel
Partner, Head of Public Sector
Contact Silvia Michel Learn more about Silvia Michel
Silvia Michel
Contact Silvia Michel Learn more about Silvia Michel
Silvia Michel
Partner, Head of Public Sector
Silvia Michel
+49 30 890482 251

Our awards

We’re proud of the awards we’ve won. And we’re just as happy that our clients give us top ratings! We’re working hard to keep it that way. And that’s a promise!

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