With effect from 1 January 2021, cash donations will no longer be tax-deductible for the purposes of income tax and corporation tax. This is set out in the draft bill Tax Omnibus Act 2021, which was recently tabled in Parliament.
Proof
Anyone wishing to claim a tax deduction for a donation must provide written evidence of that donation. This also applies to donations made in cash. In such cases, proof is usually provided by means of a receipt.
In practice, however, it appears that receipts are being issued for donations that have not actually been paid. This is evident, for example, from the fact that the recipient organisation does not record the donations in its accounts.
To prevent such fraud, it is now laid down in law that donations made in cash are not tax-deductible.
Fundraising
For charities, (door-to-door) collections are an important source of income. Nevertheless, in this context, there is no objection to abolishing the tax deduction for cash donations. People who contribute to charities in this way usually do not do so with a view to claiming the deduction. Generally speaking, they do not receive a receipt either.