[Osmf-talk] Taxing of donations to OSMF (was RE: Translations of the ODBL)

David Ellams dave.ellams at dunelm.org.uk
Mon Jul 26 12:42:12 UTC 2010


IANATA :) (I'm not a tax accountant!) I believe in the UK, it is the
other way around. Donations to charitable bodies actually reduce the
corporation tax paid. It used to be the case that the charity could
claim back the tax the company had already paid (so a donation of GBP
1.00 would be worth up to GBP 1.28 to the charity). 

I believe I heard something recently about this changing so that the
company now gets tax relief against the donation, rather than the
charity claiming it back. But either way, tax is paid on profits except
where they are donated to charity. Charities can also claim back income
tax paid where individual tax payers make donations. Whether OSMF would
be eligible to register as a charity I have no idea. I suspect it would,
but it would be an administrative burden, as charities have a lot of
hoops to jump through.

Cheers

David

On Mon, 26 Jul 2010 15:14 +0300, "Jaak Laineste" <jaak at nutiteq.com>
wrote:
> > Am 26.07.2010 10:00, schrieb Jaak Laineste:
> > >  I have more practical case also: I just got informed that according
> > > to our law all the donations to some organization who is not in our
> > > national list of "non-taxable" NGO-s need to be taxed quite heavily
> > > (total ~50% of the given amount).
> > 
> > "Not applicable", because it is inconsistent with European Union law ...
> > 
> > You should inform the European Commission, DG Customs & Taxation.
> > 
> > What kind of tax is this?
> 
> It is called "corporate income tax". I was a bit wrong, it is about 22%,
> not
> 50. 
> 
> Maybe it actually makes sense over here: it is meant to avoid to smuggle
> profits out of a company. Estonian companies do not have generally
> corporate
> income tax, as it is usual in many other countries; only profits which
> are
> cashed out (as dividends, salary or something) will be taxed. Until you
> do
> not take money out of the business then there is no income tax at all.
> Problem here is that donations are taken not as normal business cost item
> for a company, but more like cashing out profits. However, our "Customs &
> Taxation" has special list of "tax advantage" NGOs to whom companies can
> donate money without need to pay the tax, these are different charity
> organizations, Church etc. I'm just preparing application to get our OSM
> Chapter also listed there too, but I'm not sure if we will succeed to
> show
> that OSM is more like a general charity than a limited hobby group. And
> as
> far as I know no foreign NGO can get to the list.
> 
> Btw, what is situation in Germany or UK - does company need to pay some
> extra taxes if it gives money (or other support) to a NGO? If company
> anyway
> needs to pay corporate income tax, then maybe there is just no need for
> the
> extra taxing of donations.
> 
> Jaak
> 
> 
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