Tax advantages of donations

MAKING A DONATION COSTS LESS AND LESS ?

For example: making a donation of 150 € will only cost you 7,50 €. Impressive, isn’t it?

Deductible up to 95% on personal income tax!

The tax reform improves the advantages for both individuals (Personal Income Tax) and legal organizations (Corporate Tax) that make donations to foundations or associations declared of public utility, as is the case of Fundesplai – Fundació Catalana de l’Esplai.

This is intended to encourage new donations and an increase in contributions from current donors [1].

Individuals

Since January 1, 2016, individuals who collaborate with the Fundació Catalana de l’Esplai (an entity under Law 49/2002) can benefit from a 95% deduction on your income tax return for the first €150 of your donation (these deductible amounts are limited to 10% of the donor’s personal income tax base).

In addition, donors may apply a deduction of 55% to the amount given in excess of €150, if they have donated to the same entity in the last three years, or 50% across the board:

*1 Donations to the same entity for 3 years or more.
*2 The Fundació Catalana de l’Esplai (Fundesplai) is also registered in the registry of entities for the Promotion of the Catalan Language. Donations made to these entities are entitled to a deduction in the IRPF of 15%, with a maximum limit of 10% of the total regional tax liability [2].

An example is shown below:

According to this, an individual who made a donation of about €320 in 2015 could deduct almost €170, so that his effective cost was €150.
Now, thanks to the approved tax reform, this same person could increase his or her donation up to €467 while maintaining the same final cost of €150. If you were also a regular donor, the deduction would be even greater.

Legal entities (organizations)

With respect to donations of legal organizations (companies, organizations, etc.), the tax reform does not change the 35% corporate income tax deduction percentage, but An increase in the deduction is added for those companies that in the two immediately preceding years have made a donation with the right to deduct to the same organization for an amount equal to or greater in each of them than the amount of the new donation:

^*1 Donations to the same organization for 3 years or more.

These deductible amounts are still limited to 10% of the corporate income tax base of the donor legal organization.

Unlike in the case of individuals, the amounts exceeding this limit can be deducted in the tax periods ending in the ten years immediately and successively, i.e., even if there is not enough taxable income to be able to fully enjoy the deductions, these are not lost, but can be deducted later, if the donor has benefits in the following years.

[1] The new Law 27/2014, of November 27, 2014, on Corporate Income Tax, in force since January 1, 2015, amends Law 49/2002, of December 23, 2002, on the tax regime for non-profit organizations and tax incentives for patronage, legal regulations applicable to the Fundació Catalana del Esplai.

[2] Article 32 of Law 16/2008, on Fiscal and Financial Measures of the Generalitat de Catalunya.