Under certain conditions, waiving compensation for voluntary work performed is deductible as a gift from income on which income tax is due (if the total of deductible gifts exceeds the threshold).
Working for an ANBI
An important condition for the deduction of donations is that they are made to an ANBI. That stands for Algemeen Nut Beogende Instelling. All ANBIs are registered in the ANBI register.
Another important condition is that the volunteer must be entitled to remuneration under the regulations of the ANBI for which he or she works AND that the ANBI can and will pay that remuneration even if the volunteer does not waive it. This means that remuneration must be set out in, for example, the ANBI's articles of association, by-laws or other document formally adopted by the ANBI. And the asset and liquidity position of the ANBI must allow payment of the remuneration.
To make the waived volunteer fee deductible as a donation, the ANBI must declare in writing to the volunteer that a fee has been waived. Every year, the tax authorities draw up a model of this volunteer statement available.
Volunteering for an association
An association usually does not qualify as an ANBI. This is because, given the nature of an association, it is not the general interest that comes first, but rather the (individual) interest of its members. An association does often qualify as an SBBI, which stands for Social Interest-Bearing Institution. But donations to an SBBI are not deductible. What is deductible is:
- a periodic donation (made annually for at least five years and recorded in writing in a notarial or private deed);
- to an association with full legal capacity;
- which has 25 or more members;
- and is not subject to corporate income tax or exempt from corporate income tax.
The Tax Authority's Income Tax Knowledge Group was asked whether waiving a volunteer allowance towards an association could be considered a deductible periodic donation. The donation would then be recorded in a written donation agreement and the amount of the annual donation would be linked to the voluntary allowance to be received from the association in a year.
The knowledge group is of opinion that it is not a periodic gift because the amount of the annual gift would then depend on the work to be done as a volunteer. The volunteer can then determine the term of the gift by volunteering more or less.
In principle, a periodic donation to an association is deductible if the volunteer sets off the agreed periodic donation against the volunteer fee to be received. PLEASE NOTE: there should be no contractual link between the volunteer fee and the periodic gift. If the agreed periodic gift in this situation is higher than the remuneration to which the volunteer is entitled on the basis of the voluntary work performed, the excess must be paid to the association by the volunteer.
Payroll tax
Finally, for associations wanting to give their volunteers a deduction in this way, a word of warning: the volunteer scheme is capped at € 2,100 per year (and € 210 per month) for payroll tax purposes. And a volunteer is considered a volunteer for wage tax purposes as long as the remuneration per hour worked does not exceed € 5.60 (for young people under 21: € 3.30). All amounts mentioned apply to the tax year 2025.
If these amounts are exceeded, the association will generally have to withhold and remit income tax on the total volunteer remuneration to the tax authorities. This must also be done if the remuneration is offset against the volunteer's periodic donation.