Covid-19 relief - donations and amounts of deductions
The new tax preference provides for the possibility to reduce the tax base by the value of the monetary or in-kind donation made for the purposes of preventing and combating the SARS-CoV-2 epidemic.
According to the new provisions introduced under the anti-crisis shield, entities conducting business activities may make monetary donations for the benefit of the following entities:
Donations made between 1 January 2020 and 30 September 2020 shall be deducted.
The amounts of deductions are as follows for donations made:
In order to obtain the highest possible relief, it is therefore necessary to make the donation as soon as possible and, what is important, monetary donations are not subject to VAT.
Moreover, the donation relief may be deducted at the stage of making an advance payment for tax on income registered during the tax year.
ATTENTION! The value of the donation cannot be deducted when paying the lump-sum income tax in the form of a tax card, lump-sum income tax on capital funds, tax on the sale of the property.
The condition for the deduction is to document the donation made in the form of a proof of transfer to the beneficiary's bank account.
In-kind donations made for the purposes of combating, and preventing the spread of COVID-19 are subject to the same rules as for making monetary donations. This means that deductions for donations in kind under income taxes remain the same as for monetary donations and the deduction period for donations covered by the relief (1 January - 30 September 2020) is the same.
The only difference is that in the case of in-kind donations made to the entities provided for in the regulations, i.e. the entity registered in the list of entities conducting medical activities, the Agency of Material Reserves and the Central Database of Sanitary and Anti-epidemic Reserves, VAT at the 0% rate may be applied from 1 February 2020 to 31 August 2020 for the following items and goods:
The condition for the application of the reduced VAT rate is the conclusion of a written agreement of donation between the donor and the recipient, which implies that the goods supplied will be used for the purposes of combating and preventing the spread of COVID-19.
In the case of in-kind donations made between 1 February 2020 and 25 March 2020, i.e. the date of entry into force of the Ordinance of the Minister of Finance on the reduction of VAT rates for certain goods and services in the case of free of charge releases of certain goods, the provisions of this Ordinance provide for the possibility to apply the reduced rates during this period also in the case where no written agreement of donation has been concluded beforehand - the condition in this case is the confirmation of making the in-kind donation in writing.
The written confirmation should include at least the data identifying the donor and the recipient, the value of the donation and the recipient's declaration of the acceptance of the donation.
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