Communication from the Commission of the European Union on Promoting the Role of Voluntary Organisations and Foundations in Europe

(The following are extracts, made by the Budapest Observatory from the annexes to the main text of the Communication dating from 1997, which analyses and favourably assesses the role of the third sector in the member states.)

Fiscal treatment of gifts by individuals

Denmark

Single tax deductible gifts can only be made to bodies on the list published by the tax authorities (see above, paragraph 16). Each gift must be at least 500 Dkr. Up to a maximum of 5 000 Dkr. A year. The first 500 Dkr. Are not deductible. In addition, deductible gifts can be made through covenants (contractual annuities) up to a limit of 15% of earned income plus capital gains before tax, or up to a maximum of 15 000 Dkr., whichever is the greater. Covenants must normally be for a minimum of ten years.

Finland

Gifts given to non-profit associations are not taxable income. Gifts are not deductible in income taxation of individuals

Germany

Gifts made by a natural or legal person liable to tax with the aim of promoting charitable, ecclesiastical or religious activities for activities which are recognized as being for the general

good to an association recognized by the tax authorities as being of public utility can be deducted from the donor's taxable income up to certain ceilings; the ceilings vary, depending on the purpose of the gift, by between 5% and 10% of the donor's total taxable income.

Ireland

Natural persons may deduct gifts to the organization specified in Article 56 of the law on the IRS up to a value equal 15% of their net taxable income. This also applies to legal persons with non-profit objects belonging to, or established by, religious denominations, teaching or educational associations, scientific research or culture, literary, artistic etc.

Italy

Gifts for the public good, humanitarian, religious or political objects may be

deducted up to a limit of 2%. This limit may be exceeded when the gift is going to organizations for promoting study, research, dissemination of information, the acquisition,

maintenance or restoration of part of the cultural heritage or to institutions which organize fairs and exhibitions with a particular cultural or scientific interest with the authorization of the Ministry of Culture.

Gifts for the central institute for the support of the clergy of the Italian Catholic Church, and those for helping people in developing countries, may be deducted up to a ceiling of LIT 2 million.

Gifts to voluntary organizations which are entered in the register are no longer tax-deductible. The only deduction possible at present is that concerning, on the one hand, an organization subject to corporation tax or, on the other hand, a voluntary organisation with legal personality. Entry in the regional register of voluntary organizations is therefore no longer sufficient.

Luxembourg

Gifts totalling over Flux 5 000 per annum are tax-deductible up to a ceiling of 10% of total income or Flux 10 000 000. Any gifts must be to recognized organizations for the public good and other bodies recognized as such in law.

The Netherlands

Gifts made to approved Dutch associations are tax-deductible at a rate of between 1% and 10% of taxable income on sums exceeding HFL 120 per annum and per donor. Gifts made under contracts in authenticated form for at least five years are tax-deductible in full in all cases where they are for the benefit of a Dutch association composed of at least 25 members (in which case public good is not a criterion), provided that such gifts are in the form of an annuity, that the association has full legal capacity and that it is not liable for corporation tax.

Spain

Donors who are natural persons may deduct from their taxable income donations or gifts to bodies which enjoy tax concessions, under certain conditions and with certain limitations. Normally, this deduction will be 20% of the value of the gift. However, total tax-deductible expenditure must not exceed 30% of taxable income.

Fiscal treatment of gifts by companies

Denmark

As for individuals, except that single gifts are deductible from taxable revenue and covenants are allowed up to a maximum of 15% of taxable profit (or 15,000 Dkr.).

Finland

Gifts given to non-profit associations are not taxable income. In company taxation, gifts are, within certain limits (FIM 5000-150.000), deductible if given for scientific or artistic purposes to associations nominated by The National Board of Taxation.

Germany

Companies may deduct gifts up to 0.2% of the sum of total turnover and salaries and wages paid.

Ireland

Legal persons may deduct gifts given as cultural sponsoring or to organizations such as teaching or educational, scientific research or cultural, literary or artistic associations from their taxable profits up to a total value equal to 0.2% of turnover, and 50% of any sum in excess of that.

Italy

As in the case of private persons, gifts for purposes concerning the public good, or humanitarian, religious, or political purposes, can be deducted up to a ceiling of 2%.

Luxembourg

The same rules apply to companies as to individuals.

The Netherlands

Gifts made to associations or foundations registered in the Netherlands which have an academic, religious, charitable, cultural object or one for the public good (including political parties) are tax-deductible when they exceed a total of HFL 500 up to a maximum of 6% of taxable income.

Spain

Organizations with a legal personality may under certain circumstances deduct gifts made to bodies which enjoy tax concessions. This deduction may not exceed 10% of taxable income in most cases.

In addition, participation by businesses in activities for the public good, and - in particular - the acquisition of works of art to be offered as a gift and expenditure on promoting and developing certain arts also attract tax concessions.