Tax donation for the public good and for a bit of tax credit

Every year those companies that generate profit have the opportunity to support certain team sports or artistic endeavours financially. New ways of supporting in exchange for tax credit have been added to the existing system as of this year. When companies declare their advance tax payment, they have the opportunity to make a tax donation – a certain percentage of the sum they are to play as corporate tax. In the next stage the tax authorities transfer this sum to the beneficiary designated by the company, while the tax payer is entitled to receive a tax credit for the donation.

In addition to this, enterprises can also choose to support various causes directly through the old system that has existed since 2011. The two systems work in parallel, but it is very important to know that only one of them can be used in a given year. Maximum 50 percent of the corporate advance tax or 80 percent of the corporate tax can be donated for supporting a cause.

The tax credit companies get for their donations: 7.5 percent of the donation made from the advance tax payment and 2.5 percent of the donation made from the corporate tax payment. This means that in 2016 those companies are entitled to receive the 7.5-percent tax credit that made a donation until 20 December 2015, the deadline for declaring the advance tax payment. The deadline for the corporate tax declaration is 31 May 2016 and those who make a donation before this deadline get a 2.5-percent tax credit. In comparison with the old system, companies can gain a 2-4 percent tax advantage