Swedish corporates could get tax relief on (some) donations for first time

Sweden’s Government has proposed a new tax relief on some corporate donations – but Giva Sverige has urged politicians to ensure a wider range of nonprofits are eligible.

The Government’s September budget proposed that each year, companies could receive tax relief at the same rate as corporation tax (currently 20.6%). This would apply to donations totalling up to SEK 800,000 (€72,600), with a minimum eligible donation of SEK 2,000 (€182).

This offers larger benefits than the proposal of a recent Government inquiry, which suggested a 25% tax reduction on gifts up to SEK 200,000, and then 5% on further donations up to SEK 400,000.

However, the budget’s proposal only relates to donations to nonprofit organisations carrying out social assistance activities, or promoting scientific research.

Charlotte Rydh, secretary general of Giva Sverige, welcomes the more generous deduction rate, but is concerned about its narrow scope. She says:

“The government’s proposal in the budget bill is a welcome step that can make a real difference for parts of the non-profit sector. The raised ceiling and the simplified model send a clear signal that donations from companies are an important part of financing the activities of non-profit organizations for a democratic and robust society.

“At the same time, we see that the proposal still limits the potential by continuing to exclude more purposes from the tax reduction.”

However, Giva Sverige notes that a current investigation by the Government into the financing of the cultural sector suggests that there is scope for more charitable purposes to be added into the new tax reduction.

As in many other countries, Sweden’s charity sector is facing financial challenges. As reported in Fundraising Europe previously, Giva Sverige found in a summer survey that a fifth of Swedish nonprofits had to reduce their operations during the first half of the year. Earlier in the year, another report found that the number of Swedes giving money to charity (53%) was recovering, but still significantly below where it was 10 years ago (63%).

Picture by ptrpl4 on Unsplash