Last updated: 10 April 2019
As of April 1st, 2019, all non-profit organisations/units of worship receiving sponsorships/donations/private grants from corporate taxpayers or benefiting from an allocation of up to 3.5% from natural person taxpayers’ income tax must be registered in the Special Registry of the tax agency.
According to the Law no.30/2019 for the approval of the Emergency Ordinance no.25/2019, published in the Official Journal no.44 of 17.01.2019, the Registry organised by NAFA will be available on the tax agency’s website as of April 1st 2019.
INCOME TAX
According to the new regulations, natural person taxpayers can choose to allocate up to 3.5% of the due income tax in order to support non-profit organisations and units of worship, starting with April 2019 income. According to the Fiscal Code, in order to be entitled to receive sponsorships and donations, all NGOs and units of worship must be registered in the Registry when the taxpayer/employer or tax authority pays these sums.
With regard to the taxpayers who choose to have the due amount calculated by the tax authority, by virtue of a request filled to this end, they are allowed to require that the amount of up to 3.5% of the income tax to be allocated to the same beneficiary for a period of up to 2 years, renewable. Taxpayers having opted for income tax withholding of these amounts cannot choose the same option for the same period and source of income anymore.
Micro-enterprises offering sponsorships/donations in order to support NGOs can benefit from facilities allowing them to deduct the amounts of up to 20% covering these sponsorships/donations from the income tax due for the quarter during which the aforementioned expenses were registered, only if the NGOs are registered in the Registry at the signature date.
As of April 1st 2019, micro-enterprises will be able to offer sponsorships/donations for the benefit of any NGO, and not only to entities accredited as social services suppliers with at least 1 licensed social service as it was the case before.
NGOs can apply for signing up in the Registry upon request, by filling a standard form (Form 163) which will be also available on NAFA’s webpage. In order to sign up in the Registry, the NGO must fulfill cumulatively the following conditions:
- Not to carry out activities outside their registered field; based on a declaration on their own responsibility;
- To have submitted all tax returns required by law;
- Not to have outstanding of more than 90 days tax obligations towards the general budget; to have submitted all the annual tax returns required by law;
- Not to have been declared as inactive.
CORPORATE TAX
According to the Fiscal Code, legal entity taxpayers granting sponsorship and/or donations, as well as private grants providers can deduct the sums covering these operations from the corporate tax, within the limits established by law.
As of April 1st 2019, for taxpayers to benefit from the above-mentioned tax facilities, the NGOs must be registered in the Registry organised by NAFA at the date of signature of the sponsorship/donation/grant agreement.
Moreover, taxpayers providing sponsorships/donations/grants to NGOs must fill and submit the Declaration 107 – providing information related to the beneficiaries of the sponsorships/donations/private grants – to the tax authority via electronic means.