In a Chamber letter consider that extending the tax relief on donations to associations is not desirable.
Motion
The Government is responding in this way to a motion tabled by Inge van Dijk (CDA) during the debate on the 2023 tax bill. The motion calls for an investigation into whether the tax incentives for donations to ANBIs can also be applied by associations. A key difference between an ANBI (public benefit organisation) and an association is that an ANBI aims to serve the public good, whilst an association primarily pursues the individual interests of its members.
Existing facilities
Tax incentives for donations to associations already exist. Many associations qualify as SBBI (organisations promoting the public interest) and can make use of the exemptions from inheritance and gift tax applicable to SBBI organisations.
In addition, regular donations made to the following are deductible for income tax purposes: associations which:
- are not subject to corporation tax or are exempt from it, and;
- have full legal capacity and;
- at least 25 members.
Periodic gifts are fixed regular benefits that end on the giver's death and that:
- Are recorded in a notarial or private deed and;
- for five or more years;
- pay out at least once a year.
The essence of a donation is that it is made out of generosity. The membership fee payable to an association is compulsory, and in return, members are permitted to take part in the association’s activities. The membership fee therefore does not qualify as a (regular) donation and is not tax-deductible.
Since 1 January 2023, the tax deduction for regular donations has been capped at €250,000 per calendar year. For tax partners, this cap applies to the total amount of regular donations made by those partners.
Ordinary (non-recurring) donations to associations are not deductible for income tax purposes. Ordinary donations to a SBBI Charitable Foundation are, however, deductible for income tax purposes.
You can find more information about the association and tax matters in our memo Tax liability of foundation and association.