French tax relief on charity gifts

YOU CAN deduct up to 75% of your donations to charities in France and Britain from your French tax bill next year if you make the donations before December 31.

Tax relief on charitable donations in France follows a two-tier system.

Associations eligible for 75% tax relief are those which provide meals, accommodation, free medical and dental services for needy people, overseas or in France.

These include Les Restaurants du Coeur, La Croix-Rouge and Médecins sans Frontières.

If you donate money to such organisations you can declare it on next year's tax assessment (box UD, section 7, page 4 of the 2042 form). The tax break is available for donations of up to €510, though this may be adjusted and the final figure for 2009 income was not available on going to press.

Donations above this limit and those to other types of charity and organisations are treated differently and should be inserted in box - UF, in the same section. For these donations the tax relief is at 66% and applies to donations of a value of up to 20% of your taxable income.

Bodies eligible for 66% include associations recognised as being of public utility (eg. the Fondation de France or the Fondation Nicolas Hulot), broadly the French equivalent of an English charity, as well as other bodies which benefit the public rather than a restricted group and are non-profit-making, such as educational, scientific, sporting or arts bodies or even political parties.

Similar British organisations also qualify.

For example if you make a €600 donation to a charity that helps people in difficulty, you can take off 75% of €510 (the ceiling) = €382.50 and then 66% x €90=€59.40.
Therefore you can deduct a total of €441.90 from your final tax bill.

Make sure you are sent donation certificates/receipts as without them the tax office will not give you the tax reduction. Receipts are not required if declaring by internet but you should keep them in case you are asked to provide proof.

Donations can include subscriptions to charities, letting a charity use premises free, giving them your income from investments and expenses incurred by volunteering.

If your donations exceed the limits to which a tax reduction can be applied you can carry them over for deduction purposes for up to five years.

n WHILE you would hope donations are put to good use, 17 charities are under investigation by the Paris public prosecutor, suspected of fraud and misappropriating donations. For a list see the Money section of our website.

In the light of this, financial watchdog the Cour des Comptes has proposed tax reductions be stopped for donations to bodies which cannot openly show where the funds end up and that it should vet charities before their donations become tax deductible.

The proposals have yet to become law.