Tax benefits of a donation

When you make a financial donation to the Lalique Museum, you may increase this gift by 25% before deducting it from your taxes. The tax authorities therefore allow you to deduct a quarter more than you actually donated.

Please note: In the Netherlands, there is a threshold for donations of 1% of your gross salary, up to a maximum of 10%, with a minimum of €60. For periodic donations, no threshold applies.

For example: You donate €100 to the Lalique Museum. You may then deduct €125 from your income tax. The amount depends on whether you pay 30%, 40%, or 52% tax.

• If you pay 30% tax, this means that for every €100 you donate, you get €37.50 back (30% of €125 is €37.50).
• If you pay 40% tax, the refund increases to €50; 
• and at 52% tax, the refund increases to €62.50.

But there is a maximum: The Dutch Giving Act states that your tax deduction may be increased by a maximum of €1,250 per year. This means you may donate up to €5,000 per year to the Lalique Museum. Because €1,250 corresponds to 25% of a donation of €5,000. If you wish to give more, you can, but you may not add more than €1,250 for the deduction.

If you wish to support the museum for several consecutive years, you can have your donations recorded in a notarial deed. The amount will then be fixed for a period of at least five years.

A periodic donation is a gift in the form of a fixed and regular periodic payment to the Lalique Museum that runs for at least five years. A periodic donation must be recorded in a notarial deed. If this is the case, each installment can be deducted from your income in the year in which the installment is paid. The tax benefit is therefore greater than with a one-time donation. Here too, your increase in the deduction may not exceed €1,250 per year.

For example: You donate €1,000 per year to the Lalique Museum. You may increase this amount by 25% to €1,250, and this forms your deductible amount. At the top tax rate of 52%, you can receive up to €650 back from the tax authorities for every €1,000 per year.
A donation of €1,000 will therefore only cost you €350 in effect. The following also applies: You may donate €10,000, but you may only deduct €11,250.

Are you considering leaving a specific amount to the museum in your will? You can do so by naming the Lalique Museum as an heir. Of course, you can specify exactly what you wish to leave to the museum from your estate. This will be recorded in your will. If you would like to donate a predetermined amount, you can assign us a legacy. The museum is exempt from gift and inheritance tax, so you can be sure that your donation will go exactly where you intend! All donations and bequests are managed by the museum and used strictly for museum-related activities. If you wish, you can designate your gift for a specific activity. The museum has selected a number of special projects for this purpose: acquisitions, an exhibition, research, restoration, education, or a project of your choice.

We are very grateful for every amount (large or small) and will certainly put it to good use. So if you are considering including the Lalique Museum in your will as an heir, please feel free to contact us to discuss the possibilities.

For personal advice, we recommend sending an email to info@laliquemuseum.nl for the attention of our general director, Mr. S. de Bruin. 

Companies also benefit from tax advantages when donating to cultural institutions that have been designated as cultural ANBIs by the Dutch Tax Authorities. Certain conditions must be met. Two types of taxes are involved: corporate income tax and value-added tax (VAT).

As of January 1, 2012, donations are deductible up to 50% of the taxable profit, with a maximum of €100,000. However, the increase is capped at €2,500.

If a company makes a non-business payment to a Public Benefit Organization (ANBI), the company may be eligible for a donation deduction. This deduction amounts to a maximum of 50% of the taxable profit per year, with a maximum of €100,000. If there is a service or consideration in return, this is considered sponsorship. In that case, the company records it as business expenses.

EXAMPLE A
Donation to cultural ANBI €2,000,-
Increase 50% €1,000,- +
__________________________________
Deductible amount €3,000,-

EXAMPLE B
Donation to cultural ANBI €7,000,-
Increase 50% but maximum €2,500,- +
__________________________________
Deductible amount €9,500,-

For a donation of at least 90% for a general public benefit purpose:

• An ANBI does not have to pay inheritance tax or gift tax on inheritances and donations it receives in the context of the public interest.
• Distributions made by an ANBI in the public interest are exempt from gift tax.
• If an organization is designated as an ANBI by the Tax Authorities, a donor can deduct donations from income or corporate tax (within the applicable rules).
• Companies may increase the deduction of their donation in corporate tax by 50%. Donors can therefore give more!

More and more cultural institutions (with ANBI status) and large funds offer the possibility to establish a Named Fund. This can be set up within the institution itself or with a supporting foundation. Often, this involves larger donations and a minimum amount is required, for example € 50,000. As the founder, you may determine the name and the purpose of the fund. Of course, the purpose must fit within the objectives of the institution where the fund is established. The fund or the cultural institution ensures that the money is spent on the specific goal and takes care of the administrative processing. This way, as the founder of a Named Fund, you benefit from the knowledge and experience of the cultural institution, without having to worry about organizational and administrative matters.

A Named Fund can be established both during your lifetime and by will. A notarial deed is not required to establish such a fund unless the donation exceeds the threshold amount. Setting up a Named Fund with periodic donations to a cultural institution is fiscally the most attractive option. You then enjoy full deduction for income tax purposes. The fund must have ANBI status in that case.

In general, a company will have a business interest in making a payment. This is the case, for example, when there is a concrete consideration, such as with sponsorship.
In each case, it must be assessed based on the facts and circumstances whether the payment concerns business expenses or a donation. The latter is important because business payments
are fully deductible as normal expenses for corporate income tax purposes, without any threshold or maximum. The payment then has the character of a business expense.

“EXAMPLE: A company pays an amount of € 5,000 (excluding VAT) to a Public Benefit Organization (ANBI). In return, the company’s name is mentioned in several publications of the institution. The payment is deductible from the corporate income tax base (up to a maximum of 25%). The net cost is then € 3,750. The cultural institution must charge VAT on the € 5,000 and invoices an additional 21%. In this case, that is € 1,050. For a company, VAT is in many cases deductible.”

Tax incentives give patrons a helping hand. However, above all, it is simply very enjoyable to give to culture. Giving is also an art. You have a passion for culture and you are in a position to do something extra. Something that everyone can benefit from. Organizations, institutions, participants, spectators.

For personal advice, we recommend that you send an email to info@laliquemuseum.nl for the attention of our general director Mr. S. de Bruin.