How can I reduce my tax bill by donating to a charity?

Donate to an association can not only support important causes, but also enable you to benefit from tax cuts significant. In France, the government encourages generosity through tax breaks. 

How do I go about it? reduce your tax by donating to an association like Action Education? What is the tax reduction in this case? Find the answers to your questions, whether you are an individual or a company.

Make a donation to an association to obtain a tax reduction

Individuals can benefit from tax reduction equal to 66 % the amount of donations made to non-profit-making organisations of a philanthropic, educational, scientific, social, humanitarian, sporting, family or cultural nature. This is the case for Action Education, which is a recognised non-profit organisation.

This reduction applies up to a limit of 20 % of taxable income. If the amount of your donations exceeds this limit, the excess can be carried forward to the next five years. This means that you can continue to benefit from the tax reduction for large donations, even if you have exceeded the annual limit.

How can I claim tax relief for my donation?

Every year, when you file your annual tax return, donations made to organisations of general interest or recognised as being of public benefit must be entered in box 7UF of the tax return. declaration no. 2042 RICI. This is the only way to have them recognised by the French tax authorities and benefit from the related tax reduction.

For donations made in year N, you will have to declare them with your income in the spring of year N+1. For example, in the spring of 2024, you will have to declare donations made in 2023. Donations for 2024 will be declared in 2025.

You do not need to enclose any supporting documents with your tax return, but it is essential to keep the tax receipts issued by the associations, as they will be needed in the event of a tax audit.

Corporate philanthropy: a tax deduction for corporate donations

Companies can also benefit from tax reductions when they make donations as part of a sponsorship. The sponsorship scheme allows tax reduction of 60 % for donations of up to €2 million and 40 % for higher amounts. This mechanism is particularly attractive for companies seeking to support causes of general interest while optimising their tax position.

For companies, the amount of donations taken into account for the tax reduction is capped at 20,000 euros or 5 per thousand of annual turnover. This provision ensures that the tax benefits are proportionate to the company's financial capacity. In addition, companies must declare their donations as part of their annual income tax return and keep the tax receipts issued by the beneficiary associations.