Entrepreneurs, regardless of the organizational and legal form of doing business, can save money if they make donations. The amount donated to charity can be deducted from the tax base. But to receive this benefit, you must act in accordance with the rules.
Donate only to organizations that have legalized their status
To receive a tax benefit, you must transfer funds only to organizations registered with government agencies and included in the appropriate registers. These organizations must have the status of an Organization Established for the Public Benefit (Algemeen Nut Beogende instelling - ANBI) or a Social Interest Organization (Social Belang Behartigende Instelling - SBBI). You can check whether organizations receiving charitable contributions have the appropriate status using active links:
What amounts can be deducted from the tax base?
The amount of charitable donations that can be tax-exempt depends on the legal form of the business.
If you are ZZP/EMZ or have VOF or maatschap:
The donation threshold is 1% of your income, but not less than 60 euros. The difference between the donation amount and the threshold value is subject to exemption. If you donate to ANBI, which works in the cultural sector, you can add 25% to your deduction.
For example: Your income is 60 euros per year. The threshold is 000 euros. You donated 600 euros to ANBI, working in the cultural sector: 1000 euros + 1000% = 25 euros. A threshold value of 1250 euros is deducted from this amount. The tax exemption is 600 euros.
Does ANBI work in the cultural sector? learn from the link.
If you make the same donations over 5 years, the threshold can be eliminated. To do this you need to fill out periodic donation agreement or draw up this agreement with a notary. In this case, you and your tax partner can deduct up to €250 of donations per year from your tax base.
If you donate to SBBI, only recurring donations are deductible; a one-time donation to SBBI cannot be deducted from your tax base. SBBI must meet the following conditions:
- Number of members - at least 25,
- The organization must have full legal capacity,
- The association must be exempt from or not subject to corporate tax,
- SBBI is established in the EU, Sint Maarten, Curacao, Aruba, Bonaire or another country specified by the tax authorities.
If you are running a business in BV form
Donations to ANBI are deducted from corporate tax declarations. You can deduct 50% of your profits per year, but not more than €100. When donating to ANBI working in the cultural sector, the deduction can be increased by 000%, but not more than €50.
If you have questions about tax optimization, get advice from our experts!
Publication Date: 08.12.2023
