October 10, 2023
Tax benefit for donations to a Public Benefit Organisation (ANBI)
Have you ever thought about making a donation to an ANBI? By doing so, you are supporting a good cause and also receive a tax benefit!
The tax benefit depends on your type of company. It is important to note that you do not have a tax benefit for a cash gift. If you have a sole proprietorship (eenmanszaak) or a general partnership (V.O.F.), the following rules apply to you:
Regular (one-time) donation
A regular gift is a gift that you only make once (a one-time gift). A gift that you make annually, but not recorded in an agreement, also counts as a regular gift. For regular donations, you may deduct the full amount of the donation. This is on the condition that your gift must be at least 1% of your threshold income, with a minimum of €60 euros. However, there is a maximum amount that you can deduct. The maximum amount you can deduct is 10% of your threshold income.
For example, if you have a threshold income of €20,000 euros and you want to make a gift of €4,000 euros, the gift in this case is 20% of your threshold income, which meets the requirement of 1%. You can deduct a maximum of 10%, which means that you can deduct €2,000 euros of the €4,000 euros.
A gift is a periodic gift if it meets the following 3 conditions:
- you give the same amount every year to the same institution / association;
- you pay the amount at least in 5 consecutive calendar years;
- you have recorded in an agreement when your annual donation will stop, for example after 7 years.
With a periodic donation, you may deduct the full amount of the donation. From January 1, 2023, this deductibility also has a maximum, namely €250,000 per year. If you made your periodic donation before October 4 at 4:00 PM, this maximum does not apply and you may still deduct the full amount in your tax return.
For a gift to a cultural ANBI, you receive even more tax benefit. You can increase the amount of your gift by 25%, which means you can multiply it by 1.25. Then you can deduct that amount. There is a maximum increase of your gift of 1,250 euros. For regular donations, you still need to take into account the threshold and the maximum.
For example, if you give a periodic gift of €10,000 euros per year to a cultural ANBI, you can multiply it by 1.25, which is €12,500 euros. The increase is €2,500 euros, but this is higher than the maximum of €1,250 euros. Therefore, instead of deducting €12,500 euros, you can deduct only €11,250 euros.
If you have this type of company, there are slightly different rules for you. You can deduct your gifts from your profits. In one year, this can be a maximum of 50% of your profit, with a maximum of €100,000 euros. If you make a gift to a cultural ANBI, you receive even more benefit. You can then increase the amount of your gift by 50%, with a maximum increase of €2,500 euros.
For example, if you make a gift of €3,000 euros to a cultural ANBI, you can deduct €3,000 x 1.5 = €4,500 euros from your profit. The increase is €4,500 - €3,000 = €1,500 euros. €1,500 is lower than €2,500, so the maximum is not exceeded.
The rules for the deductibility of gifts to an ANBI vary depending on the situation. It is useful to check which rules apply to you before making a donation.
Do you want to know if the good cause you donated to is an ANBI? You can check it here.