When you decide to support a charity with your business, this usually involves a (financial) donation. It definitely doesn’t need to be financially at all times, but in many cases a part of the support is financially. And that part comes with benefits. I recently started my specialization in the financial benefits of donating or gifting as a company, because I like to advice commercial companies in the best way when they support a charity. In the end, when there is more benefit, there is more money to donate to charity. So it is a true win-win situation. I will briefly give you some insights in the financial aspect of donating or gifting as a company:
The financial benefits are stated by the government as they stimulate donations to charity, therefore it is tax-related benefits. Depending on your companies’ location, each tax office may have different regulations when it comes to donating and gifting, they may ask for specific or detailed requests. But in general the following rules apply to receive tax-benefits for donating:
5 rules that apply for tax benefits when your company donates to charity:
- Your company donates to a charity that is registered with the right purpose. Usually, charities get a certification from the country they are registered in, make sure to check these certificates and which charities have the right certificate for the right purpose.
- Your business donates a certain amount for a longer period of time (for instance: x amount every year, for a period of 5 years). This shows a continuation instead of a one-off.
- The company and the charity have the agreement of the donation registered in a form or contract which is signed.
- You can show proof of the donation from your business to the charity with a receipt or a bank statement.
- The commercial party shouldn’t have any possibility to retrieve the donation (partly) in a way.
Usually, on top of these rules each country applies one or two regional regulations – make sure to check which apply to your business and the place of registration of the good cause you will work with.
Would you be interested to know whether your company can receive tax-benefits from supporting a charity? Reach out to me and I can do the check, in order to let you know how much you can benefit financially from donating.
The financial benefits of donating are always worth it!
This page is specified on the benefits of donating for The Netherlands