Tax Amendment Act 2025: Important changes for non-profit organizations from 2026 onwards

The Tax Amendment Act 2025 brings comprehensive changes for non-profit organizations, associations, and other NPOs. After the Bundestag passed the law on December 4, 2025, it was approved by the Bundesrat on December 19, 2025. The new regulations will apply from January 1, 2026.

The aim of the legislature is to strengthen volunteer work and non-profit status, reduce bureaucracy, and give organizations more economic leeway. At the same time, new requirements are being created, particularly with regard to the drafting of statutes and actual management. The changes affect key provisions of income tax law (EStG), the German Fiscal Code (AO), and association law (BGB).

The key changes in non-profit and association law from 2026 are listed and explained below:

Higher lump sums for volunteers

From 2026, tax-free allowances will be increased:

• Trainer allowance: from €3,000 to €3,300 (Section 3 No. 26 EStG)

• Volunteer allowance: from €840 to €960 (Section 3 No. 26a EStG)

These adjustments are intended to make it easier to recruit and retain volunteers.

Higher exemption limits for economic activities

• The exemption limit for taxable economic business operations rises to €50,000 (Section 64 (3) AO).

• The same applies to sporting events organized by sports clubs (Section 67a AO).

This will allow clubs and other NPOs to expand their economic activities without immediately having to fear tax disadvantages.

Relief in the use of funds

The obligation to use funds promptly will no longer apply in future to corporations with revenues of up to €100,000 (Section 55 (1) No. 5 AO). This gives smaller organizations in particular greater financial flexibility.

New charitable purpose: e-sports

E-sports is recognized as a charitable purpose for the first time (Section 52 (2) No. 21 AO). The law thus opens up new opportunities for relevant clubs and initiatives.

The explanatory memorandum to the law clarifies that non-profit status in e-sports is only recognized for games that comply with youth protection regulations. The following are excluded:

• Games without age ratings,

• Games with realistic violence,

• Games of chance,

• Games in which additional payments result in advantages.

In addition, corporations must have measures in place to prevent addiction. In practice, this means that associations should develop internal guidelines on youth protection and addiction prevention in order not to jeopardize their non-profit status.

Photovoltaics and sustainability

The use of funds for photovoltaic systems will no longer be subject to tax penalties (Section 58 No. 11 AO) as long as the operation of the system does not become the main purpose of the corporation. This strengthens sustainable investments in the non-profit sector.

Higher liability exemption limit for board members

The liability exemption limit for board members and other members of governing bodies is raised to €3,300 (Sections 31a, 31b BGB). This reduces personal risks in voluntary work.

Elimination of sphere allocation: relief with limits

A particularly relevant change is the elimination of sphere allocation if:

• the income from all economic business operations does not exceed €50,000 and

• there is an overall profit (Section 64 (3) sentence 2 AO).

In these cases, it is no longer necessary to check whether a special-purpose operation exists. However, this simplification only applies to income tax.

For sales tax, the distinction remains necessary as soon as the small business thresholds are exceeded (Section 19 UStG).

Conclusion: Opportunities and relief for NPOs

The Tax Amendment Act 2025 brings real relief for non-profit organizations:

• higher lump sums for volunteers,

• reduced bureaucracy through new exemption limits,

• new opportunities through e-sports and photovoltaics.

Our non-profit expert WP/StB Götz Löding-Hasenkamp and his team will be happy to assist you with any questions you may have about the Tax Amendment Act 2025 and its impact on your organization.