Hidden profit distributions - watch out for corporate donations to (related) foundations

The Federal Fiscal Court’s case law on the delimitation of donations and hidden profit distributions leads to great legal uncertainty in practice and makes corporate donations more difficult. In its decision of 13 July 2021 (I R 16/18), the Federal Fiscal Court addressed the question of whether and to what extent donations from a corporation to a charitable foundation can be qualified as hidden profit distributions. In her current Steuerboard article, Hannah Roggermaier explains the consequences of a hidden profit distribution and explains why the Federal Fiscal Court’s case law is at odds with the increasing demand for more social responsibility and voluntary commitment on the part of companies.