Donations to organizations assisting people affected by COVID-19 or to research organizations engaged in research activities aimed at eradicating COVID-19. |
Premises
The current situation leads individuals and legal entities to make donations to bodies assisting people affected by COVID-19 or to institutions engaged in research activities aimed at eradicating this virus. The tax benefits related to such donations are defined by different rules for depending by the persons making the donations (individual vs. legal entity) and the beneficiaries. This Circular is intended to illustrate the tax benefits governed by the Decree-Law no. 18 of 17 March 2020, which have introduced a specific regulation in article 66 concerning “Liberal donations in support of measures to combat the epidemiological emergency by COVID-19”. Tax allowance for donations made by individuals and non-commercial entities For donations in cash and in kind, executed in the year 2020 by individuals and non-commercial bodies, in favor of the State, Regions, local and regional authorities, public bodies or institutions, foundations and associations legally recognized as non-profit entities, aimed at financing interventions in the field of containment and management of the epidemiological emergency by COVID-19, the newly issued rules recognize:
-
- a deduction from gross tax equal to 30% of the cost incurred (or the value of the donated asset),
- for an amount not exceeding EUR 30,000.
Tax allowance for donations made by commercial enterprises
For donations in cash and in kind, given in support of measures to combat the epidemiological emergency by COVID19 , carried out in 2020 by persons carrying out business activities and receiving business income, is Article 27 of Law no. 133 of 13 May 1999 applies; this rule provides that such kind of donations in favor of populations affected by public calamities or other extraordinary events, even if they occurred in other States, are fully deductible from business income, for the purposes of the related taxes. The above donations must be addressed to foundations, associations, committees and bodies identified by the decree of the President of the Council of Ministers of 20 June 2000, that is:
-
- non-profit-making organizations of social utility referred to in Article 10 of Legislative Decree no. 460 of 4 December 1997;
- international organizations of which Italy is a member;
- other foundations, associations, committees and bodies which, established by a deed of incorporation or statute drawn up in the form of a public deed or a notarized or registered private deed, include among their purposes humanitarian interventions in favour of populations affected by public calamities or other extraordinary events;
- state, regional and local public administrations, non-economic public bodies;
- trade unions and trade associations.
LDP Tax & Law is at your disposal for any further information or in-depth study of the above topics.