guide to tax deductions and donations – idealista/news

Donations are free payments to deserving entities such as the third sector or research institutes, rewarded by the Legislator with tax deductions or deductions. L’Revenue Agency automatically proposes the deduction o deduction for charges and donations in the pre-compiled declaration, but the taxpayer can modify it. The details of the methods and limits of deductibility depend on the type of beneficiary of the donations, below is all the information.

What are deductions for charges and donations?

Deductions for charges and donations represent tax breaks provided for by Italian legislation which allow certain expenses incurred to be deducted from the overall income deductible charges or voluntary donations. Donations include donations of money or in kind to non-profit organizations, social promotion associations and other organizations with social or general interest purposes. These deductions are subject to maximum limits and require accurate documentation to be validated according to current tax regulations.

However, as of 2020, all monetary donations must be traceable by bank transfer, check or other electronic means. The deductible charges include a wide range of expenses, including medical expenses, social security contributions, building renovations and donations. It is, therefore, important to maintain documentation relating to these expenses to obtain tax benefits.

Where to insert the donations in the 730?

Donations can be included in the tax return with form 730 in the section of deductions for health and welfare expenses and other deductions, specifically in the part dedicated to liberal donations.

There is a special one voice in the 730 model, or in Table E (deductible charges and expenses and deductible charges), Line from E8 to E10. It is important to keep the documentation relating to the donations made, such as receipts or certificates, for any checks by the Revenue Agency.

To declare the donation as a deductible expense in the 730 form, it is necessary enter the codes reported below and divided according to the percentage of deduction.

19% deduction

• 20 for amounts not exceeding 2,065.73 euros per year in favor of populations affected by public disasters or other extraordinary events;
• 21 for amounts not exceeding 1,500 euros for amateur sports associations;
• 22 for amounts up to the maximum limit of 1,291.14 euros in favor of mutual aid societies;
• 24 for amounts not exceeding 30% of the total income for La Biennale di Venezia;
• 25 for expenses relating to maintenance, protection or restoration of assets subject to restrictions in accordance with the provisions of the Cultural Heritage Code;
• 26 for donations to public or non-profit cultural and artistic activities;
• 27 for entertainment organisations;
• 28 for donations to foundations operating in the music sector;
• 31 for schools;
• 35 for the Fund for the amortization of government bonds.

26% deduction

• 61 for amounts not exceeding 30 thousand euros per year in favor of non-profit organisations, humanitarian, secular and religious initiatives managed by associations and foundations, bodies and committees indicated by decree of the President of the Council of Ministers, in countries not members of the OECD;
• 62 for donations to political parties.

30% deduction

• 71 for donations in cash or in kind to non-profit, socially useful organizations and social promotion associations.

35% deduction

• 76 for voluntary organizations (amounts not exceeding 30 thousand euros).

Deduction of charges and donations: how is it calculated?

The deductions for expenses and donations offer two types of tax advantages distinct. Tax credits directly reduce thetaxpayer’s gross tax. They vary from 19% to 35% depending on the characteristics of the beneficiary of the donation. Deductible expenses, on the other hand, allow the overall income to be reduced before the tax is calculated.

As regards liberal donations, the 19% deduction is applicable for monetary donations to:

• Populations affected by public disasters or other extraordinary events, carried out through non-profit organisations, international organisations, foundations, associations, committees, public and non-economic bodies;
• Amateur sports clubs and associations;
• Public cultural and artistic activities, public entertainment entities, non-profit foundations and associations, as well as foundations in the music sector;
• State, non-profit educational institutions belonging to the national school system.

We find, again in 730, the item deduction charges and donations 26% in favor of non-profit organisations, humanitarian, religious or secular initiatives, managed by foundations, associations, committees and other bodies; or, addressed to political parties registered in the first section of the national register.

Finally, the tax deductions of 30% and 35%which vary according to the beneficiary of the donation and concern donations in cash or in kind made to non-profit organizations of social utility (Onlus) and social promotion associations.