European Approach to Cross-Border Giving

June 1, 2010 | Andrew Valentine

Recent developments in Europe related to cross-border giving demonstrate the increasing recognition of the importance of facilitating charitable giving and charitable activities that cross international borders.  In contrast with the very restrictive rules in Canada, judgments in the European Union, and recent developments in the U.K., have moved in the direction of increasing the availability of tax recognition for international charitable donations.

In the 2009 decision of the European Court of Justice in Hein Persche v. Finanzamt Ludenscheid, the Court held that the treaty guarantee of free movement of capital among Member States in the E.U. meant that such states could not provide for tax rules that would limit tax recognition for charitable gifts only to charities established in that state.  The states must allow the taxpayer to show that a gift to a charity in another Member State satisfies the requirements imposed by domestic legislation conferring the tax benefit.  In other words, Member States cannot provide for differential tax treatment of charitable gifts to domestic charities versus charities in other Member States based solely on the residence of the charity.

In response to this development, the U.K. announced in its March 2010 Budget that it would extend U.K. tax relief to eligible charitable organizations based in the E.U., Norway and Iceland.  Organizations in these countries would be eligible to apply to Her Majesty’s Revenue and Customs demonstrating that the organization is charitable under U.K. law, duly registered with any charities regulator in its home jurisdiction, and that it is managed by fit and proper persons.

It may be hoped that the Canadian system moves in a similar direction with respect to its willingness to extend tax recognition to appropriate cross-border giving.  At the very least, public policy debate on this issue would be welcome in Canada, to determine whether the Canadian rules can better facilitate international philanthropy while maintaining appropriate safeguards over the Canadian tax expenditure.


This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at

© 2021 Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested by contacting