Amount of deduction
Regulation: Article 20 Law 49/2002
Taxpayers will have the right to deduct from the total amount, less the deductions and bonuses provided for in Chapters II, III and IV of Title VI of the LIS , 35 percent of the deduction base.
The amounts corresponding to the tax period not deducted may be applied in the settlements of the tax periods that conclude in the 10 immediate and successive years .
If in the two immediately preceding tax periods donations, gifts or contributions with the right to deduction have been made in favor of the same entity for an amount equal to or greater than, in each of them, that of the previous tax period, the deduction percentage applicable to the deduction base in favor of that same entity will be 40 percent .
The basis of this deduction may not exceed 10 percent of the taxable base of the tax period.
Amounts exceeding this limit may be applied in tax periods ending the 10 immediate and successive years.
Note:
Article 22 of Law 49/2002 establishes that the General State Budget Law may establish a list of priority patronage activities and beneficiary entities . In relation to these activities and beneficiary entities, the General State Budget Law may increase by five percentage points , as a maximum, the percentages and limits of the deduction for donations of Law 49/2002 . For these purposes, the percentage of 35 percent applicable to this deduction may be raised to 40 percent and the increased percentage of 40 percent to 45 percent. In addition, the maximum limit of 10 percent of the impossible base of the tax period will be raised to 15 percent .
Example:
Ask:
Company "A" has made the following donations to the same foundation to which the special regime provided for in Law 49/2002 applies.
In fiscal year 2021, can company "A" apply the increased percentage established in article 20 of Law 49/2002 on the deduction basis?
Answer:
The second paragraph of article 20 of Law 49/2002 establishes that the increased deduction percentage will be applied if in the two immediately preceding tax periods donations, gifts or contributions with the right to deduction have been made in favor of the same entity for an amount equal to or greater than, in each of them, than that of the previous tax period.
In accordance with the above, in the 2021 financial year, the amounts donated in the 2020 and 2019 financial years must be taken into account, but also those made in the 2018 financial year, insofar as the rule requires that in the two immediately preceding tax periods, donations had been made in favor of an entity for an amount equal to or greater than that of the previous tax period (in this case, with respect to 2019, the donations made in the previous financial year, i.e. 2018, would have to be analyzed).
Therefore, since company "A" did not make any donation in fiscal year 2018, in fiscal year 2021 it will not be able to apply the increased deduction percentage provided for in article 20 of Law 49/2002 to the donation made in said fiscal year.
In addition to what is indicated in the previous paragraph in relation to the 2018 financial year, company "A" must take into account that in order to apply the increased deduction rate in the 2021 financial year, it is necessary that in the 2019 and 2020 financial years donations have been made in favor of the same entity for an amount equal to or greater, in each of them, than that of the previous financial year. Regarding the donation made in the 2021 fiscal year, it is not required for the application of the increased rate that it be higher than that made in 2020.