How to evaluate a donation in kind to an association?
Verified 01 January 2024 - Directorate for Legal and Administrative Information (Prime Minister)
Gifts in kind consist of a simple physical delivery of an object (for example a work of art), a service or a building (house, land). Its valuation depends on the type of goods or services concerned. Donation in kind, granted in particular to bodies of general interest by an individual or a company, is entitled to a tax reduction under certain conditions. The rules differ depending on whether the donation is made by an individual or a company.
Gift made by an individual
The rules depend on the organization to which the donation is made:
The rate of tax reduction depends on the recipient organization and the amount of donations.
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Body of general interest or recognized as being of public interest
The tax reduction is 66% the amount of the donations.
The reduction shall apply up to 20% taxable income.
Example :
For a donation of €200 to a sports or cultural association.
You are entitled to a tax reduction of: €132 (€200 x 66%).
Organization helping people in difficulty (meals, care, accommodation)
The rate of tax reduction depends on the total amount of donations.
Donations up to €1,000
For donations made in 2023 up to €1,000, the tax reduction is 75% of the given amount.
The limit €1,000 applies to the total amount of donations made in 2023.
Example :
For 2 donations of €300 and €200, or a total of €500.
You are entitled to a tax reduction of: €375 (€500 x 75%)
Donations over €1,000
For the portion of the 2023 donation less than or equal to €1,000, the tax reduction is 75% of the given amount.
The limit €1,000 applies to the total amount of donations made in 2023.
For the part of the donation greater than €1,000, the amount of the tax reduction shall be 66% of the given amount.
The cumulative amount of gifts that qualify for the tax reduction 66% may not exceed 20% of your taxable income.
Example :
For 2 donations of €500 and €700, or a total of €1,200.
You are entitled to a tax reduction of: €750 (€1,000 x 75%) + €132 (€200 x 66%), or a total tax reduction of €882.
Donations to the Heritage Foundation for the Safeguarding of the Religious Heritage of the Municipalities of France
You must have made a donation (or more) for the benefit of the Heritage Foundation to ensure the conservation and restoration of religious real estate heritage.
This heritage must belong to the following municipalities:
- Municipalities of metropolitan France with less than 10,000 inhabitants
- Overseas municipalities with less than 20 000 inhabitants
You must have made your donation (or donations) between september 15 and december 31, 2023.
The rate of the tax reduction depends on the total amount of your donations.
Donations up to €1,000
For the part of the donation less than or equal to €1,000, the tax reduction is 75% of the given amount.
Example :
For 2 donations of €300 and €200, or a total of €500.
You are entitled to a tax reduction of: €375 (€500 x 75%)
Donations over €1,000
For the part of the donation less than or equal to €1,000, the tax reduction is 75% of the given amount.
The limit €1,000 applies to the total amount of donations made in 2023.
For the part of the donation greater than €1,000, the amount of the tax reduction shall be 66% of the given amount.
Example :
For 2 donations of €500 and €700, or a total of €1,200.
You are entitled to a tax reduction of: €750 (€1,000 x 75%) + €132 (€200 x 66%), or a total tax reduction of €882.
The value of the donation depends on its nature.
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Gift or contribution of property
The valuation of a property given away free of charge by an individual is the purchase price of the property or, in the case of second-hand property, the price at which the donor could have resold the property.
In the case of a company, the property transferred free of charge may be:
- an item included in an inventory account,
- or property recorded in a capital account.
Goods in an inventory account are those for:
- to be sold in the course of the company's business, or
- to be consumed in the company's production activity.
Property entered in a capital account means property intended to be used permanently for the activity of the company (building, production tools, vehicle,...).
The valuation of a property in a stock account transferred free of charge by a company corresponds to the stock value of the property, i.e.:
- for goods purchased, at the purchase price plus transport, handling and other costs directly incurred in acquiring them,
- for a good produced by the company, the cost of production.
The valuation of property in a capital account is the market value of the property at the date of the gift.
The gift of property in a capital account results in a transfer of ownership of the property. It constitutes a transfer free of charge. For the recipient organization, the value of the property received is taxable.
If the property is fully depreciated, the gift of the property does not qualify for a tax reduction for the donor company.
In addition to the value of the property, there may be transportation, handling and other costs directly incurred in making the gift.
Whether the property is granted by an individual or a company, the valuation of the property is done by the donor. In the case of a gift in kind from an individual, the association must verify whether the valuation is accurate and corresponds to the real value of the object.
Loan of a room
The appraisal of a premises is the amount of rent that the owner would have received if he had leased the property.
Where the free supply gives rise to a lease contract, it entitles the owner to a tax reduction. However, rent forgone by the landlord remains subject to tax under the property income class.
Where the free supply does not give rise to a rental contract, the owner is then considered to reserve the enjoyment of the property. The making available does not therefore constitute a gift in kind giving entitlement to a tax reduction.
Service Delivery
The evaluation of a service provided free of charge corresponds to the costs incurred by the company to produce the service.
Labor loan (Skills sponsorship)
The assessment of the free provision of employees corresponds to wages and charges, after deduction, where appropriate, of various aids and reductions associated with employment contracts.
Donation made by a company
The rules depend on the organization to which the donation is made:
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General case
The tax reduction depends on the total amount of general interest donations made by the company.
The total amount of donations made by the company is less than $2 million
Income or business tax reduction equal to 60% of the amount of donations up to €20,000 or 5% of turnover if the latter amount is higher.
The total amount of donations made by the company is over $2 million
Income or business tax reduction equal to 40% of the amount of donations up to €20,000 or 5% of turnover if the latter amount is higher.
Donations to organizations that provide benefits or products to persons in difficulty
Income or business tax reduction equal to 60% of the amount of donations up to €20,000 or 5% of turnover if the latter amount is higher.
The value of the donation depends on its nature.
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Gift or contribution of property
The valuation of a property given away free of charge by an individual is the purchase price of the property or, in the case of second-hand property, the price at which the donor could have resold the property.
In the case of a company, the property transferred free of charge may be:
- an item included in an inventory account,
- or property recorded in a capital account.
Goods in an inventory account are those for:
- to be sold in the course of the company's business, or
- to be consumed in the company's production activity.
Property entered in a capital account means property intended to be used permanently for the activity of the company (building, production tools, vehicle,...).
The valuation of a property in a stock account transferred free of charge by a company corresponds to the stock value of the property, i.e.:
- for goods purchased, at the purchase price plus transport, handling and other costs directly incurred in acquiring them,
- for a good produced by the company, the cost of production.
The valuation of property in a capital account is the market value of the property at the date of the gift.
The gift of property in a capital account results in a transfer of ownership of the property. It constitutes a transfer free of charge. For the recipient organization, the value of the property received is taxable.
If the property is fully depreciated, the gift of the property does not qualify for a tax reduction for the donor company.
In addition to the value of the property, there may be transportation, handling and other costs directly incurred in making the gift.
Whether the property is granted by an individual or a company, the valuation of the property is done by the donor. In the case of a gift in kind from an individual, the association must verify whether the valuation is accurate and corresponds to the real value of the object.
Loan of a room
The appraisal of a premises is the amount of rent that the owner would have received if he had leased the property.
Where the free supply gives rise to a lease contract, it entitles the owner to a tax reduction. However, rent forgone by the landlord remains subject to tax under the property income class.
Where the free supply does not give rise to a rental contract, the owner is then considered to reserve the enjoyment of the property. The making available does not therefore constitute a gift in kind giving entitlement to a tax reduction.
Service Delivery
The evaluation of a service provided free of charge corresponds to the costs incurred by the company to produce the service.
Labor loan (Skills sponsorship)
The assessment of the free provision of employees corresponds to wages and charges, after deduction, where appropriate, of various aids and reductions associated with employment contracts.
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