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Give to charity and receive a tax reduction

Donations to associations can bring benefits and cut the financial cost

22 November 2016

GIVING to charity is encouraged by the taxman in France but you do need to make your donation by the end of the year if you wish to benefit on your next tax bill.

The tax reductions are sizeable meaning that, if you pay income tax, you may end up only out of pocket for a third or a quarter of the amount of your donation. The reductions are 66% for an ordinary organisation of ‘general interest’ or 75% for ones ‘helping people in difficulty’. They apply as long as the body meets certain criteria.

Note that it is a tax reduction and not a credit so you do not receive money back from the tax office if your tax bill is not high enough to benefit fully.

Most British charities would be eligible under the criteria for a French organisme d’intérêt général, however French ones are most likely to be familiar with the scheme and able to provide a receipt slip to refer to when you fill in your tax forms next year (these should be retained for three years in case of a tax office check). If giving to one elsewhere in the EU it is best to use the Transnational Giving Europe network (www.transnationalgiving.eu) which ensures it has been vetted and provides a suitable receipt slip.

In France, eligible associations include some linked to the English-speaking community. For example, Cancer Support France meets the criteria for ‘general interest’ of being not-for-profit, meeting a need in society, and not catering for a closely-restricted group, as do the French branches of the Royal British Legion.

Qualifying bodies may involve such activities as cultural and sporting clubs and organisations with scientific, educational or humanitarian goals. If in doubt check websites or ask the organisation directly.

If you volunteer for an eligible charity you might like to know that it is possible to ‘donate’ your expenses to the organisation, by renouncing them in writing to the charity.

Among bodies that always qualify are associations d’utilité publique – large charities with humanitarian activities and minimum levels of membership and funds (for example the food bank charity Les Restaurants du Coeur or La Croix Rouge Française). There is a similar category of fondations d’utilité publique (which do not offer memberships and are set up with a founding gift) which includes Fondation Abbé Pierre for the homeless or 30 Millions d’Amis, for pets. The 1989 ‘Coluche Law’ (named after the founder of the Restos du Coeur) created the 75% reduction, applicable to up to €530 of gifts (then it reverts to 66%) to bodies giving free food, shelter or healthcare, such as the first three mentioned in the paragraph above.

To obtain a tax reduction, insert the amount of the gift, if it is to a body in France, in your main income tax declaration, section 7, in 7UD for the 75% rate or 7UF if the 66% rate applies. Gifts to bodies outside France but within the EU go on form 2042C, box 7VA or 7VC.

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