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Practical manual for Income Tax 2020.

Example: Deduction for donations made to entities included in the scope of Law 49/2002

Mr. SMA has made the following donations during 2020:

  • To the NGO “TT” included in the scope of Law 49/2002 to which no donation had been previously made, the amount of 1,000 euros.
  • To the foundation “XX” included in the scope of Law 49/2002 to which donations have been made for the same amount in the last two years the amount of 1,000 euros for priority patronage activities

Determine the amount of the deduction.

Solution:

Deduction base (1,000 + 1,000) = 2,000

Amount of deduction for donations = 867.50

Breakdown of amounts:

  1. Donations to the NGO “TT”

    (1,000 euros) (1)

    150 euros at 80% = 120

    850 at 35% = 297.50

  2. Donations to the “XX” Foundation

    (1,000 euros) (2)

    1,000 euros at 45% = 450

    Total (120 + 297.50 + 450) = 867.50

Notes to the example:

(1) The 1,000 euros donated for the first time to the NGO “TT” that have not been allocated to priority patronage activities and programs are subject to the percentages provided for in article 19 of Law 49/2002 for donated amounts, which have increased by five percentage points since January 1, 2020 (rising to 80% on the first 150 euros and 35% on the remaining amount). (Back)

(2) The 1,000 euros donated to the “XX” foundation for priority patronage activities and programs is subject to a percentage of 45% resulting from raising the percentage provided for since January 1, 2020 in article 19 of Law 49/2002 for cases in which the taxpayer has made donations for an equal or greater amount or value to the same entity in the two previous years, by five percentage points when it is allocated to priority patronage activities and programs (40% + 5% = 45%). (Back)