I want to help: Charity and taxes
03.03.2022In connection with the situation in Ukraine, we receive a lot of questions about charitable contributions. Do they reduce the tax base? In this article, we will analyze in detail in which cases you are entitled to a tax refund if you are an individual, and also how you can reduce the amount of tax payable if you are an entrepreneur or a legal entity.
Do you want to help a specific person?
If you, as an individual, want to help someone in Ukraine, then you can simply find the coordinates of this person and transfer / transfer funds to him. And forget: there will be no tax refund. It's just your good will.
If you want to help someone in the Netherlands (for example, a person on welfare who is hosting refugees), then it is better to do it with "things". The fact is that you can make a gift to a resident of the Netherlands, but not more than 2.274 euros, and such a deduction to charity will also not reduce your tax base in any way.
At the same time, the money received by the addressee will change his income level (that is, it will increase the taxable base of the person to whom you transferred the money) and may reduce the state's social payments to him.
In which case will your charitable contribution reduce your tax base?
Individuals
Several conditions:
- You transferred funds to a fund that is registered in the database ANBI or SBBI.
- Your gift/contribution is voluntary. That is, mandatory contributions, for example, church ones, cannot be deducted from taxes.
- You receive nothing in exchange for your gift. That is, the purchase of a lot (the money that you paid for the opportunity to win something pleasant or useful) does not count either, because it gives you the opportunity to win.
- You can confirm that you have made this gift/contribution (for example, using your account statement).
It is important to note that assistance can be one-time (gewone giften), or it can be periodic - periodieke giften (if you make contributions for at least 5 years). In this article, we analyze the one-time fee. More here.
How much can be subtracted?
Calculations
The minimum threshold is 1% of your taxable income (eg salary, income from other jobs, pension, etc.) but not less than 60 euros. That is, 60 euros are not deductible in any case. If you have 50 thousand income, then your threshold is 500 euros, which are not deductible. Above this, the deduction will already go, but its maximum is 10%. That is, with the same income of 50.000, it will be 5.000.
- For example, you made a gift for 5.000-500 (threshold) = 4.500 deduction.
- If you made a gift for 10.000, then the deduction will still be 4.500.
- Made for 3.000? Then 3.000-500=2.500 deduction.
If your income is 20 thousand, not 50, then, accordingly, the lower bar will be 200 euros.
Entrepreneurs
Entrepreneurs can reduce the amount of taxes payable in the same way as individuals if they transfer funds to a fund that is registered in ANBI. The minimum threshold is the same as for individuals.
At the same time, assistance to charitable organizations can be taken into account as expenses only if there is a profit. If the entrepreneur has not earned anything, then he will not receive anything.
Entities
Donations to charities that are registered with ANBI and SBBI may be deducted from profits. The deduction is a maximum of 50% of the profit per year, but not more than 100.000 euros. At the same time, the legal entity must be able to prove the fact of transfers to charity.
If you find it difficult to figure it out on your own and you need help, then contact a specialist for a paid consultation. Nalog.nl. Do not forget that you need to collect all documents that confirm your transfers to charities. All this will be useful to you, but not this year, but next, 2023, to fill out the declaration for 2022.
You want to help charities outside the Netherlands
Help! But if your addressee is not registered in the ANBI register in the Netherlands, then you cannot count on a reduction in the tax base and on a tax deduction. This is also help in its "pure" form: given to a good cause - and you can forget.
If the organization you want to help has a branch in the Netherlands, check the register of charitable foundations again. Next, see above.
What if you yourself want to open a branch of some charitable organization in the Netherlands or just create a charitable foundation to help people in other countries? It's possible. How? Long, expensive and require a lot of work. But Nalog.NL can help you with this. More details - by link.
