Corporate philanthropy
General tax system
When a company subject to tax in France makes a donation to a general interest organization, it benefits from a reduction in corporate tax or income tax equal to 60% of the amount of the gift made in cash, jurisdiction or in kind, within the limits of 0.5% of H.T.
If this ceiling is exceeded, it is possible to carry forward the surplus to the following five fiscal years.
The counterparties
Corporate sponsors may benefit from certain communications and public relations counterparties, which constitute an additional benefit to the donor.
The value of these counterparties must remain in a “marked disproportion” with the amount of the donation. It is commonly accepted a ratio of 1 to 4 between counterparty and grant amounts, that is, the value of the counterparties granted to the sponsoring undertaking must not exceed 25% of the donation amount.
E.g.: a company making a donation of €10,000 will be able to benefit from compensation up to €2,500. It may be the presence of the logo or the name of the company in the communication of the given operation, free entries, distribution of catalogues, provision of spaces, ...
In-kind or skill sponsorship
Corporate philanthropy is not limited to financial support: it can also be the provision of material assistance to the beneficiary’s project.
In-kind or skill sponsorship may include:
- the return of capital property (e.g. donation of vehicle),
- of goods in stock (e.g. miscellaneous materials),
- in the performance of services (e.g.: free creation of a website)
- the provision of material means (e.g. loan of a vehicle or business premises), personal (e.g. free provision of an employee for the accounting of an association) or company-specific techniques.
The eligibility criteria for this form of sponsorship are the same as those for a financial contribution.
Depending on the case, the company’s contribution must be valued:
- at cost price,
- the net book value of the assets of the undertaking,
- up to the total wage costs (salary + charges) of the staff provided.
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