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Sponsor: donations for the purchase of cultural property

Verified 25 February 2021 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Finance

Sponsorship is a device by which a company can make a donation to an organisation, either in the form of financial or material aid, to support a work of general interest or to acquire a declared cultural property national treasury. In return, it can benefit from a tax reduction.

Donations for a work of general interest

This work must contribute to the promotion of artistic heritage, the defence of the natural environment or the dissemination of French culture, language and scientific knowledge.

The donation can take one of the following forms:

  • In numerary
  • In kind
  • Competence

Donations are considered patronage if they are made to any of the following organisations:

  • State and its public institutions
  • Foundation or association recognised as being of public interest or general interest (non-profit, not benefiting a small circle of people)
  • Endowment Fund
  • Authorised non-profit-making organisation whose sole purpose is to provide financial aid to SMEs (investment, support, company start-up or takeover aid, financing of working capital requirements, honour loan without guarantee and without interest in particular) 
  • Organisation of the live performance for the dissemination of dramatic, lyrical, musical, choreographic, cinematographic and circus works, neither pornographic nor violent
  • Organisation for the protection of cultural property against the effects of armed conflict 
  • Company with the main activity of organising contemporary art exhibitions 
  • Public or private higher education institution accredited.

The tax reduction granted to companies applies both to donations made to an organisation established in France and to a European Economic Area (EEA) countries.

FYI  

These donations are usually made without consideration.

Warning  

where the recipient offers consideration equivalent to the amount received, the payment is not considered a gift but is considered to be the remuneration of a service. If this equivalent consideration is in the form of an advertising benefit to the paying company, it is a sponsorship transaction.

It may be made to an organisation to support a work of general interest, whether:

  • Public or private selfless management
  • Or a company whose capital is wholly owned by public legal entities (State, national public institutions, local authorities)

FYI  

the payment of a gift is not subject to VAT: titleContent.

The tax reduction is a subtraction of the amount of corporate or income tax owing by the donor company in the remittance year.

The tax reduction is capped. This means that the company cannot reduce the amount of its tax above certain thresholds, regardless of the number of donations.

A company imposed on income or corporation tax can benefit from a two-tier tax reduction:

  • For the portion of the gift amount less than or equal to €2 million, the tax reduction shall be equal to 60% of this amount.
  • For the portion of the donation amount greater than €2 million, the tax reduction shall be equal to 40% of

However, the tax reduction cannot exceed €20,000 or 5 per thousand of annual turnover excluding tax (ceiling applied to all payments made).

The tax reduction is applicable to payments made in the years ended (closing every December 31).

FYI  

if the ceiling is exceeded, the surplus may be carried over to the following 5 years. However, the amounts carried over may be added to the donations made each year only up to the annual ceiling.

Example :

An SME that achieves a CA of €1.5M and who donates €9,000 therefore, over a year donates more than 5 per thousand of its CA (1,5M€ x 5 per thousand = €7,500). The applicable ceiling is €20,000, since the donation is higher than the rate of 5 per thousand of the CA (7,500€).

She is given a tax credit 60% on this donation €9,000either €5,400.

A company that carries out more than €10 000 of payments and donations must report in electronic form within the same time limit as that laid down for the declaration of results; the following

  • Amount and date of such payments and donations
  • Recipient Identity
  • Value of goods or services received as consideration where available

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individual company

The donor company subject to income tax (IR) or partnership must:

  • calculate the amount of the tax reduction using the calculation help sheet #2069-M-FC-SD,
  • carry forward the amount of the tax reduction on the income tax return to the "other distributions" box,
  • attach form No. 2069-RCI summarises all tax credits and reductions for the year.

Payments are not deductible for the year determination of taxable profit.

The recipient of the gift must issue a tax receipt 11580 to be included on the income tax or income tax return (except for the internet return). He must keep this receipt.

The recipient of the gift must declare to the tax authority the identity of the donor for donations of an annual amount greater than €153,000 by structure when they qualify for a tax reduction. Food donations are not covered by this declaration.

Company

The corporate tax (IS) donor company shall:

  • calculate the amount of the tax reduction using the calculation help sheet #2069-M-FC-SD,
  • at the time of the annual declaration of results, attach the form dematerialised No. 2069-RCI summarises all tax credits and reductions for the year.

Payments are not deductible for the year determination of taxable profit.

The recipient of the gift must issue a tax receipt 11580 to be included on the income tax or income tax return (except for the internet return). He must keep this receipt.

The recipient of the gift must declare to the tax authority the identity of the donor for donations of an annual amount greater than €153,000 by structure when they qualify for a tax reduction. Food donations are not covered by this declaration.

FYI  

the donation made by a company in the form of patronage in kind or jurisdiction is then valued at cost, or at net book value for the assets of the company.

Donations for the acquisition of a national treasure

This is the purchase or payment in favour of the purchase of goods which can be described as "national treasure".

To be considered as such, they must fall into one of the following categories:

  • Property belonging to the collections of the museums of France
  • Public archive or property classified as historical archive
  • Well listed historical monument
  • Property forming part of the movable public domain other than public archives
  • Property of major interest for the national heritage in terms of history, art or archaeology

Companies imposed on corporation tax based on their actual profit can benefit from a tax reduction on the payments made.

Template for a Payment Offer to the Crown for the Acquisition of a National Treasure

Reductions in income or corporate taxes are only possible if:

  • The property has not been the subject of a government takeover bid
  • Company asks approval for direct acquisition of national treasure
  • The company undertakes to request its classification as a historic monument
  • The property is not transferred within 10 years of the acquisition
  • The property shall be placed on deposit with a museum in France, a public archives service or a library under the control of the State for a minimum period of 10 years

FYI  

the payment of a gift is not subject to VAT: titleContent.

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Payment for public purchase of cultural property

Such goods must have the character of national treasures or a major interest in national heritage.

The tax reduction is a subtraction of the amount of corporate or income tax owing by the donor company in the remittance year.

The tax reduction is capped. This means that the company cannot reduce the amount of its tax above certain thresholds, regardless of the number of donations.

The company imposed on corporation tax based on its actual profit can obtain a tax reduction equal to 90% the amount of the donation. However, this amount must be less than or equal to 50% tax owing.

FYI  

if the ceiling is exceeded, the surplus may be carried over to the following 5 years. However, the amounts carried over may be added to the donations made each year only up to the annual ceiling.

Purchase of cultural property of the character of national treasures

The tax reduction is a subtraction of the amount of corporate or income tax owing by the donor company in the remittance year.

The tax reduction is capped. This means that the company cannot reduce the amount of its tax above certain thresholds, regardless of the number of donations.

A company imposed on income or corporation tax may result in a tax reduction equal to 40% of the acquisition amount of the property. The reduction shall be taken into account in the overall cap on tax benefits.

FYI  

if the ceiling is exceeded, the surplus may be carried over to the following 5 years. However, the amounts carried over may be added to the donations made each year only up to the annual ceiling.

A company that carries out more than €10 000 of payments and donations must report in electronic form within the same time limit as that laid down for the declaration of results; the following

  • Amount and date of such payments and donations
  • Recipient Identity
  • Value of goods or services received as consideration where available

Répondez aux questions successives et les réponses s’afficheront automatiquement

individual company

The donor company subject to income tax (IR) or partnership must:

  • calculate the amount of the tax reduction using the calculation help sheet #2069-M-FC-SD,
  • carry forward the amount of the tax reduction on the income tax return to the "other distributions" box,
  • attach form No. 2069-RCI summarises all tax credits and reductions for the year.

Payments are not deductible for the year determination of taxable profit.

The recipient of the gift must issue a tax receipt 11580 to be included on the income tax or income tax return (except for the internet return). He must keep this receipt.

The recipient of the gift must declare to the tax authority the identity of the donor for donations of an annual amount greater than €153,000 by structure when they qualify for a tax reduction. Food donations are not covered by this declaration.

Company

The corporate tax (IS) donor company shall:

  • calculate the amount of the tax reduction using the calculation help sheet #2069-M-FC-SD,
  • at the time of the annual declaration of results, attach the form dematerialised No. 2069-RCI summarises all tax credits and reductions for the year.

Payments are not deductible for the year determination of taxable profit.

The recipient of the gift must issue a tax receipt 11580 to be included on the income tax or income tax return (except for the internet return). He must keep this receipt.

The recipient of the gift must declare to the tax authority the identity of the donor for donations of an annual amount greater than €153,000 by structure when they qualify for a tax reduction. Food donations are not covered by this declaration.

FYI  

the donation made by a company in the form of patronage in kind or jurisdiction is then valued at cost, or at net book value for the assets of the company.

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