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The business sector can be socially involved. We tell you how

The tragic event from 30th October that took place in Colectiv has shown, again, the weakness of the public services. The business sector can get involved financial, and not only in hard moments, but also in time, in order to help the non-governmental organizations or the public institutions to be more efficient.

The end of the year is approaching and, exactly in this period, the companies can evaluate their possibility to sustain the social services. Although the contribution has no costs, not all the companies have sufficient information to involve in charitable acts.  Theoretical, the total amount that can be transferred for health, education, culture, social assistance and so on is very large. Every year, over 200.000 companies record profit, having a sponsorship potential of approximately half billion euro.  In reality, only 20% of this value is redirected in such purposes by the companies.

From this reason, our team considers that is important to present you the legal requirements that have been applied in 2015, and also those who will be applied starting from the next year and could generate more substantial contributions.

What facilities are applied for sponsorship?

As per the Fiscal Code, the companies can give to the non-governmental organizations up to 20% from their profit tax, and to the individuals or to the public institutions up to 0.3% from the turnover. The fiscal advantage is that those expenses for sponsorships and for the private scholarships can be deducted from the profit tax due.

The sponsorships are made according to the law no. 32/1994 on sponsorships and to the law no.334/2002 on libraries.

Practically, 20% from the profit tax can be redirected  as “goods or funds to sustain some non – profit activities” based on a sponsorship contract “made in writing, specifying the matters, the value and the duration of the sponsorship, and also the rights and the obligations of the parties”.

Who can you sponsor?

According to the law no. 32/1994 on sponsorships, the beneficiaries of the sponsorships can be the following, if they perform or intend to perform an activity in the cultural, artistic, educational, scientific – fundamental and applied research, humanitarian, religious, philanthropic, sportive, of the human rights, medico – sanitary, of assistance and social services, environmental protection, social and community, representation of professional associations, and also for the maintenance, restoration, conservation and highlighting the historical monuments domains:

What happens if the value of the sponsorship is higher?

If the value of the sponsorship is higher than 20% from the profit tax due, the difference will not be lost, it will be recovered, as deduction, from the profit tax payable in the next 7 consecutive years, at the every deadline of the payment of the profit tax.

What is the sponsorship?

The law no. 32/1994 shows that the sponsorship is the legal act by which two persons agree regarding on the transfer of the legal rights of some material goods or funds in order to sustain some non-profit activities performed by one of the parties, named the beneficiary of the sponsorship.

Attention should be focused on the fact that there is a risk for the sponsorships to be considered grant, but from the legal and fiscal point of view, they have another treatment. From the fiscal point of view, the grant is a nondeductible expense for the paying entity and cannot be deducted from the profit tax due amount.

From the legal point of view, the grant is a contract through which a person, the donor, transfers, usually free of payment and irrevocable, the property right of a good to another person who accepts it and for whom the action does not involve the implication of some benefits.

What facilities will offer the Fiscal Code starting from 2016?

According to the law no. 227/2015, the new Fiscal Code, a limit of 20% from the profit tax due, but not more than 0.5% from the turnover can be redirected.