Donations for refugees from Ukraine may be deducted from income/profit tax

The government is encouraging donations for refugees from Ukraine, approving a number of measures to that end. These include the deduction from the tax profit tax in the case of corporate tax payers, i.e. from the tax base for micro-enterprises, and from the tax base of the PFM.

How?

These donations must be made to a separate Treasury account (available from humanitarian aid donations to Ukraine) through the General Emergency response Inspectorate. Any credit institution that will subsequently be communicated on its own website of M.A.I., the Government and other media channels will also be opened in lei/currency.

These amounts can be paid both on-line, cash at the counter or via the POS installed at the State Treasury units.

How much we infer?

For corporate tax payers there are 2 options:

• the deductible amount is a maximum of 5% of the salary expenditure, falling within the category of social expenditure (attention to already existing social expenditure);
• the amount is not treated as deductible when calculating the tax result, but may be deducted from the tax payable, being treated as sponsorship (up to a limit of 0,5 % of turnover, but not more than 20% tax on profit due).

In the case of income tax payers:

• these amounts will be deducted from the taxable base.

In the case of PFs that determine the annual net income in the real system:

• may deduct the expenses of the cash donations awarded, but not more than 5 % of the tax base or not more than 5 % of the annual amount of expenditure incurred on staff salaries.

In the field of VAT, goods and services provided free of charge to persons affected by armed conflict in Ukraine shall be treated as goods and services provided free of charge in the framework of sponsorship or mecenat actions, up to the amount obtained by applying a rate of up to 5 % on the annual amount of expenditure incurred on staff salaries.