The tax reduction granted to the company is subtracted from the amount of tax due in the year of the donation. It does not matter whether the company is subject to thecorporate tax (IS) or to theincome tax (IR).

The rate of the reduction varies depending on the organization receiving the donation.

General case

The company benefits from a tax reduction equal to one of the following amounts:

60 % of the amount of the donation for the fraction less than or equal to €2,000,000

40 % for the part of the donation exceeding €2,000,000

However, the amount of donations retained for the calculation of the reduction cannot exceed, over the same financial year, a ceiling of €20,000 or 0.5 % of the annual turnover excluding tax of the donating company if the latter amount is higher.

When the ceiling is exceeded during a financial year, the excess donation is spread over a maximum of 5 financial years, after taking into account any new donations made during these financial years. The rate applied to this excess is the rate applied to the initial amount.

Example :

1/ A company makes donations of an amount equal to €46,000 during accounting year N.

Its annual turnover excluding tax is equal to €5,500,000.

The ceiling applicable to this exercise is therefore set at 0.5 % of its turnover excluding tax (€27,500).

For this accounting year, the company benefits from a tax reduction equal to 60 % from €27,500 

(the ceiling) = €16,500 reduction.

The excess donation equal to €18,500 (€46,000 – €27,500) can then be taken into account during the next accounting year N+1.

2/. During the following financial year N+1, the company makes donations amounting to €20,000.

Its turnover excluding tax rose to €8,000,000.

The ceiling applicable to this exercise is therefore set at 0.5 % of its turnover excluding tax (€40,000).

For this accounting year, the company benefits from a tax reduction equal to 60 % of €20,000 + 60 % of €18,500 (surplus from the previous financial year) = €23,100 tax reduction for financial year N+1.

Form of donation

Your company can donate in three different ways:

• Cash donation: this is the donation of money by your company.
• Donation in kind: this is the donation of goods by your company.
• Donation of skills: this is the provision of your company's employees to associations.

In the case of the secondment of an employee, the value of the donation will be calculated in relation to the cost that the employee represents to the company during the period of secondment.

Example :

If an employee paid €2,000 gross per month is made available to an association for 2 days, the value of the donation will be calculated as follows:

2000 x 1.45 x 2/22 = €264.

Attention :
Donations for patronage that qualify for tax credits are not tax deductible! This means that the State is not giving you a "double gift."

The tax credit linked to the donation, equivalent to a form of reimbursement, the State considers that the expense which gave rise to it (the donation), is not deductible from taxable income. It must therefore be "reintegrated" into your taxable profit when calculating your income tax,

The payment of a donation is not subject to VAT

Reporting obligations

Justification of the donation

Unlike donations made by individuals, the benefit of the tax reduction is not conditional on the production of a receipt by the beneficiary.

It is up to the donor company, in the event of an audit, to prove the reality of the donation (amount of the payment, identity of the beneficiary, nature and date of the payment, physical description in the case of a donation in kind).

As proof, the beneficiary of the donation can issue the donor a tax receipt according to Cerfa model no. 11580*03.