Concerns voiced over plans to reduce corporate tax deductions in France

The presidents of seven organisations from the French non-profit sector published a joint letter in the country’s Le Parisien newspaper earlier this month, criticising the government’s plans to reduce corporate tax deductions on donations.

Currently, companies benefit from a corporate tax reduction on donations of up to 0.5% of their annual turnover. For those that give €1-2m a year, the rate is 60%. The government proposed reducing this to 40% earlier in the year as it sought to make savings to finance its poverty plan.

One of the co-signatories, Pierre Siquier, the president of France générosités, had already voiced concerns that such a reduction could negatively impact corporate philanthropy.

In the letter, France générosités is joined by the presidents of the French fundraising association AFF, as well as the Centre Français des Fonds et Fondations, ADMICAL, Mouvement Associatif, IDEAS, and Les entreprises pour la Cité.

The letter states that the measure “undermines the existence and sustainability of projects led by associations and foundations and is in total contradiction with Macron’s commitment to develop the patronage of individuals and companies.”

Highlighting the value of corporate philanthropy, it adds that companies are a key contributor to good causes in France, responsible for up to 3 billion euros of the 7.5 billion euros the sector receives in total annual donations.

It estimates that change in corporate tax rates, if it goes ahead, will affect nearly 80 companies and 400 million euros in donations to charity projects.

“These companies might feel that the state no longer encourages their voluntary commitment to the City and disengage,” it warns. “This is an unprecedented situation because for years successive governments have always taken steps to encourage the development of patronage. What will the State do to compensate for this loss of funding, which is much higher than the hoped-for savings?”

The co-signatories urge the government to listen to the voice of reason, and to vote against implementing the change.

The proposal is due to be voted on at the end of December.