The eligible donations for corporate sponsorship tax reduction can take different forms. It could be:
- cash donations,
- donations in kind,
- donations of competence,
Then, to be considered as patronage, the donation must be made to an organization in order to support a work of general interest or to finance the acquisition of cultural property declared national treasure.
Finally, for the donation to be eligible, there must be no equivalent consideration. A minor consideration is however tolerated. There must be a marked disproportion between the value of the gift and the value of the consideration.
The organization receiving the donation can only mention the name of the donor, without accompanying it with an advertising message. The consideration must not directly impact the commercial activity of the company making the donation.
Compensation granted by the beneficiary organization
Where applicable, all the consideration received by the company must be valued. This valuation is the responsibility of the beneficiary organization. The company making the donation is required to declare these considerations.
Organizations targeted by corporate sponsorship
For the donation to be considered as corporate sponsorship, it must be made to a general interest organization. These bodies include in particular associations and foundations recognized as being of public utility, the State and public establishments, accredited higher education establishments.
An organization can ensure that it is in the public interest by carrying out a rescript procedure with the tax administration. This is done by sending a letter by registered mail with acknowledgment of receipt.
The calculation of the corporate sponsorship tax reduction
Calculation basis for the tax reduction
The basis for calculating the tax reduction is equal to the value of the donation, which corresponds to:
- for cash donations, at their amount.
- for donations in kind or skills, at their cost price or at their net book value for items appearing in the assets.
Rate and cap of the tax reduction
The tax reduction is equal to 60% of the amount of donations. However, the amount of donations is capped. They are retained within the limit of 0.5% of the turnover excluding tax of the year during which the donation is made. You can surely use the tax return estimator for the best results.
Special rates and ceilings apply for donations related to national treasures:
Purchase of cultural goods presenting the character of national treasures, the tax reduction is equal to 40% of the amount of the acquisition. The reduction falls within the scope of the global cap on tax benefits.
Payment in favor of the public purchase of cultural goods presenting the character of national treasures: the tax reduction is equal to 90% of the amount of the donation, within the limit of half of the amount of tax due by the company.