New bill reduces France’s corporate tax deduction on donations

The tax benefits for corporate donations in France have been cut with the introduction of France’s 2020 Finance Bill, which was passed at the end of last year.

Sector bodies, France générosités and the Association Française des Fundraisers, who lobbied against the change have expressed their concern about the impact of the new Bill.

Under the old rules, companies benefitted from a 60% corporate tax deduction on donations up to 0.5% of their annual turnover. However, the government sought to reduce this to 40% as part of its plans to make savings to finance its poverty plan, with the Finance Ministry in Bercy citing figures that suggested only 78 large companies would be affected by making this change.

According to France générosités however, corporate donations contribute 3 billion euros a year to the country’s non-profits. A change to the tax rules would therefore have a negative impact, it had warned, potentially leading to increased costs for the state budget in areas supported by corporate patrons, and affecting the corporate sponsorship that currently supports local authorities and public bodies.

Commenting, Pierre Siquier, president of France générosités, said:

“Bercy pretends to believe that this will have no impact but even generous companies monitor their income. It also sends out a negative signal to those considering supporting charities.”

“This is obviously a worrying message for the whole philanthropic sector,” adds Yaele Aferiat, Director of the Association Française des Fundraisers. “But it’s also important to highlight some positive outcomes from this bill, especially the fact that it has created a 20,000 EUR tax deduction franchise that could encourage lots of small companies to engage in corporate sponsorship.”

The new rule now applies to corporate donations over €2 million made from 1 January 2020 onwards.