Čeština
DeutschA current topic brought up by the recent devastating floods is the tax aspect of donations made to mitigate the effects of a natural disaster. Who is exempt and who must take the tax into account?
- Income tax – beneficiary
Acceptance of a gift is exempt from income tax regardless of whether it is given to a natural person or a legal person. It also applies to donations provided by the employer to employees to mitigate the consequences of a natural disaster.
- Income tax – provider
On the provider’s side, the donation can be tax deductible in one of the following ways (applies to both natural and legal persons):
a) The donor deducts the value of the donation from the tax base. The prerequisite for this procedure is that the donor declares the tax base. If a tax loss is recognised, the right to deduct ceases. The sum of donations up to 30% of the tax base can be deducted from the tax base.
b) The donor of a gift, if he is a business entity, can claim as a tax expense the value of a non-monetary benefit provided for the recovery from a natural disaster. In this case, he cannot claim the deduction from the tax base described under a).
- DPH – beneficiary
The donation of cash is not subject to VAT. The donation of tangible property is subject to VAT only if a VAT deduction was claimed on its acquisition. The tax base is determined in the amount of the original cost of the property if it was acquired by purchase, otherwise in the amount of the usual price.
For the purpose of proving in tax proceedings, it is advisable to conclude a written donation agreement and keep relevant documentation (proof of purchase of the donated property, photo documentation of the extent of the damage, statement of the insurance company, etc.).