International comparisons
The law of 1 August 2003 allowed France, by filling its backlog, to benefit from one of the most incentive tax arrangements in Europe, compared with those of Spain, the United Kingdom and Germany, and encouraged a change in the mentality and image of patronage.
An attractive scheme for all income categories
By introducing a 66% tax reduction capped at 20% of taxable income, with the possibility of deferring the surplus of the grant over 5 years, France has a system comparable to that of most foreign countries in terms of capping, with a higher than average tax reduction rate.
In fact, the 100% deduction on the amount of taxable income, in force in a majority of countries, amounts to a tax reduction of less than 60%.
Country | Level of benefit | Capping the benefit |
---|---|---|
Germany | 100% deduction of taxable income: benefit proportional to the rate of taxation, equivalent on average to a reduction of less than 50% | 20% of income (possibility to carry over 5 years for donations over 25.000 €) |
Belgium | 100% deduction of taxable income: benefit proportional to the rate of cash or works of art) | 10% of income |
Canada | Federal tax reduction equal to 15% of the first $200 + 29% reduction of the portion of donations that exceeds $200 at the federal level (in Quebec, the tax credit is equal to 20% on the first $200 and 24% on the surplus) | 75% of net income with 5-year surplus carry forward |
Spain | Tax reduction from 25% to 30% depending on the categories of donations | 10% of taxable income |
United States | 100% deduction of taxable income: benefit proportional to the rate of taxation, equivalent on average to a reduction of less than 50% | Limit deductions to 50% of total gross income |
France | Situation prior to the 2003 law : 50% tax reduction (60% for a particular cause: food and emergency accommodation) | Previous situation: donation limit equal to 10% of taxable income |
| Law of 1 August 2003: 66% tax reduction for all donations (75% for a particular cause: food and emergency accommodation) | Law of 1 August 2003: 20% of taxable income (possibility to carry over surplus over 5 years) |
Greece | 100% deduction of taxable income: benefit proportional to the rate of taxation, equivalent on average to a reduction of less than 50% | 2. €896 |
Italy | 19% tax reduction | 2% of taxable income except in heritage protection where there is no ceiling |
Luxembourg | Deduction of taxable income | The annual deduction may not exceed 20% of the taxpayer’s total net income or an amount of 1,000,000 euros. Donations or gifts in excess of these limits may be carried forward to the next 2 taxation years. |
United Kingdom | - Gift aid: the government pays a posteriori to the recipient associations the tax corresponding to the donations collected (the income being taxed at source). In addition, when the donor’s income is taxed at the higher rate of 40%, he obtains a refund of the excess tax on the donation base compared to the standard rate of 22%. (18% tax reduction) | No ceiling |
Switzerland | Deduction of taxable income | >10% |
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