In order to achieve the highest possible tax credit, most companies resorted to the option of tax donation at the time of fulfilling their obligation of end-of-year corporate tax replenishment, because then they could offer their corporate tax up to 80% of their expected corporate tax amount, simultaneously acquiring a tax advantage in the form of a tax credit of 6.5 to 7.5 per cent by such arrangement.
Conversely, in case of an offering in the annual corporate tax return, the rate of such tax credit is only 2.5 to 2.26 per cent.
Tax donation for the tax year 2019
It is important to emphasize that companies continue to be allowed to apply the provisions on replenishment for their tax year of 2019 this year as well. Companies intending to apply tax donations may supplement the amount offered this year up to 80% of their annual tax liability amount, and they can realize a considerably higher rate of tax allowance even for such portion. This can be carried out by submitting a declaration of corporate tax donation – by specifying an X in return no. 1901 – by 20 December 2019 – the deadline for submitting the replenishment returns – at the latest. Simultaneously, arrangements are required to be made for tax replenishment as well.
How to schedule tax donations optimally?
Organisations operating in the field of spectacle team sports can be supported from January 2020 as well, which is still an option worthwhile to resort to by reason of the tax advantage. It is important that the support certificate required for the offering may only be obtained in case of organisations having an approved sports development programme.
Regulatory provisions enable donations from advance tax payment, too, also entitling companies to an increased amount of tax credit (6.5 per cent). Presently, taxpayers can make offerings up to 50 per cent of their tax advance payment, but next year already up to 80 per cent thereof. As from next year, it will be worthwhile to make offerings from quarterly advance tax payments during the entire year in order to ensure higher tax savings.