Donations mostly tax-deductible

When your organisation supports Stichting Vrienden voor Afrika, you show the importance of social commitment to the welfare level in Malawi. In many cases, your donations are tax deductible. Below you will find more information about the fiscal advantages.

A tax-free gift can be fully deductible if it is a business expense and the gift, in whatever form, makes a positive, useful contribution to your business operations. Think of advertising, sponsoring and donations in man-hours. This expense item is also deductible if in the year in question a tax loss is incurred (the loss is then increased).

Corporate tax and donations

A company that pays corporation tax can deduct donations to charity from its taxes. There are specific rules for this, which differ from the gift deduction for private individuals. Donations to a public benefit organisation (ANBI) are tax deductible in the year in which they are made. The amount of gift deduction may not exceed 50% of the profit and must remain under € 100,000. The profit may not become negative as a result of the tax deduction and the donations must be demonstrable in writing. The regulations surrounding gift deduction are complex. Ask the advice of a tax advisor or look for more information on the website of the Tax Authorities.

Income tax and donations

The amount of the non-business donation deduction depends on the aggregate income, the threshold calculated on that basis and the maximum applicable to the person concerned. The income of the tax partner also determines the final gift deduction. If the donation is made over a period of five years or more, it may, under certain conditions, be eligible for full deduction. Read more about this on the website of the Tax Authorities.

Gift or sponsorship

Gift

If you and your company make a donation, this is considered generosity. There is no quid pro quo attached to it. The donation must be to an ANBI (for cultural purposes) or a support foundation. An ANBI is a general benefit institution, an institution that commits itself for at least 90% for a general interest or non-commercial effort. Also, the institution may not have a profit motive with all of its generally useful activities. We are also an ANBI foundation.

Sponsorship

Sponsorship does involve a quid pro quo. It usually involves financial support in exchange for name recognition. The institution receiving the sponsorship may issue an invoice to your company. VAT is then levied on sponsoring contributions. For gifts in kind, the market value at the time the gift is made is decisive.