The sponsoring of sprominent team sports is not only an element of social responsibility of market players any more but an opportunity the conscious planning of which may generate substantial savings and tax advantage.
Our offer is for taxpayers who expect a substantial corporate tax payment obligation based on their current tax year expected profit and are to pay a higher amount of tax advance or corporate tax top up.
If you would like to support a prominent team sport and reduce your corporate tax liability without deteriorating your company's profit, you have to choose tax saving by tax donation.
Tax donation may represent a tax saving at a rate of up to three times higher for your company than the saving you can achieve if you support spectator team sports applying a traditional tax credit.
The company's profit (EBIT) remains the same in the case of a tax donation as, unlike in the case of support in the form of a tax credit, the tax donation is not an expenditure. The donation is provided from the amount of tax paid, which means that it qualifies as tax for both Hungarian accounting and IFRS purposes. The tax credit received with regard to the amount of the tax donated will qualify in the following year as income not included in the tax base. Therefore, unlike in the case of the former support form, tax donation does not affect profit in the current year in any way and improves profit in the following year.
A tax credit of 6.49% can be achieved in the case of donating your tax advance or tax advance top-up while the rate of corporate tax credit accepted by the tax authority in the case of donation in the annual tax return is 2.16%.
Limits to the amount of the donation:
The donation can be made to multiple recipients and can be divided in terms of its amount and period. The donation is disbursed to the supported organization by the tax authority and therefore has no risk.
12.5% of the donation granted for sport development qualifies as supplementary support. Prominent team sports cannot be supported within the same tax year in the form of both tax donation and traditional applying of a tax credit.
Donations can only be made by taxpayers free of any public debt.
Documents required for the tax donation (among others):
Support can be offered to the following organizations operating in prominent team sports under the titles listed below:
sports club, sports school
|Professional sports club|
Sporting body (Hungarian Olympic Committee – MOB)
|Recruitment - training tasks||X||X||X||X|
|Tangible assets investments, renovation||X||X||X||X|
|Infrastructural development to comply with safety requirements||X||X||X||X|
|Tasks associated with training, education||X||X||X||X||X|
|Sponsoring expenditures associated with competitions||X||X|
|Operation of sports property||X||X||X|
Contact our expert directly or send us an offer request!