Deducting gifts or donations
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Who is concerned
Tax deductions of gifts and donations apply to:
- any taxpayer residing in Luxembourg and who files an income tax return;
- any non-resident taxpayer who files an income tax return and who opts to be treated as a Luxembourg resident for tax purposes;
- any employee or pensioner taxpayer who resides in Luxembourg and who applies for an adjustment of the tax withholdings on salaries and on wages by way of the annual adjustment procedure.
Prerequisites
Certain gifts or donations are tax-deductible.
They are:
- cash gifts paid to foundations and public-interest organisations. A list of bodies and organisations that may receive gifts and donations that are tax-deductible by the donors is available on the website of the Luxembourg Inland Revenue (Administration des contributions directes - ACD);
-
gifts in cash or in kind to the National Culture Fund (Fonds culturel national) and to cultural institutions and organisations.
In order to be tax-deductible as special expenses, the total annual amount of the gifts/donations must be at least EUR 120.
The annual deduction may not exceed 20 % of the taxpayer's total net income, or EUR 1,000,000. Gifts or donations that exceed these limits may be reported over the following 2 tax years.
Net income consists of the revenue remaining after deducting expenses incurred for the purpose of acquiring, ensuring and maintaining revenue. Generally, we speak of 'expenses for the acquisition of income' (particularly in connection with income from paid employment or pension income).
The total net income consists of all net income, determined separately for each category of net income. The losses incurred in any category of net income are offset by net income from other categories, unless tax provisions specify otherwise.
Gifts paid to foreign organisations:
Gifts in cash or in kind to public-interest organisations in another Member State of the European Union (EU), or in a Member State of the European Economic Area (EEA) or Switzerland, may also be deducted by filing an income tax return, or by applying for an adjustment of tax withholdings on salaries through the annual-adjustment procedure.
How to proceed
Deduction through the filing of an income tax return
The taxpayer may claim a tax deduction for gifts or donations paid to, among others, public-interest organisations and non-governmental organisations when filing their income tax return.
Residents
Resident taxpayers who file a tax return may deduct gifts to organisations that satisfy the conditions listed above (see prerequisites) from their taxable income.
They must report their gifts on page 14 - section 2.C entitled "donations" (libéralités) (special expenses deductible beyond the minimum flat-rate allowance) of the model 100 income tax return form.
To fill in this section correctly, the taxpayer must:
- provide details on the recipient of the gift, the payment date and the amount paid;
- attach the certificate issued by the organisation, serving as proof that the gift was paid.
Donations to foreign organisations: Luxembourg Inland Revenue may ask the taxpayer to fill in the 'form 720' ("Cross-border donations" certificate).
Non-residents
Non-resident taxpayers may claim a tax deduction for gifts and donations only if:
- they opt to be treated as a resident for tax purposes;
and - if they file an income tax return (taxation by tax base).
They may then deduct the gifts they paid to the organisations that satisfy the conditions described above (see prerequisites) from their taxable income.
They must report their gifts on page 14 - section 2.C entitled "donations" (libéralités) (special expenses deductible beyond the minimum flat-rate allowance) of the model 100 income tax return form.
To fill in this section correctly, the taxpayer must:
- provide details on the recipient of the gift, the payment date and the amount paid;
- attach the certificate issued by the organisations, serving as proof that the gift was paid (at the request of the tax office).
Donations to foreign organisations: Luxembourg Inland Revenue may ask the taxpayer to fill in the 'form 720' ("Cross-border donations" certificate).
Deduction by applying for an adjustment of tax withholdings on salaries and wages by way of the annual-adjustment procedure
The taxpayer may claim a tax deduction for gifts or donations paid to public-interest organisations, and to non-governmental organisations by applying for an adjustment of tax withholdings on salaries and wages by way of the annual-adjustment procedure.
Residents
Employee or pensioner taxpayers who are Luxembourg residents but who do not satisfy the conditions for filing an income tax return may deduct gifts/donations to organisations recognised in Luxembourg by applying for an adjustment of tax withholdings on salaries and wages by way of the annual adjustment procedure.
Only cash gifts are tax deductible using the annual-adjustment procedure. Gifts in kind may only be deducted by filing an income tax return.
To do so, taxpayers must fill in page 5 of the form 163 R F (boxes 536 -557) and attach the certificate issued by the organisation, serving as proof that the gift was paid.
These documents must be returned to the competent RTS Tax Office. The competent office depends on the taxpayer's domicile.
The adjustment request may also be submitted directly online via MyGuichet.lu, by filling out an interactive questionnaire.
Donations to foreign organisations: Luxembourg Inland Revenue may ask the taxpayer to fill in the 'form 720' ("Cross-border donations" certificate).
Non-residents
Non-resident taxpayers may claim a tax deduction for gifts and donations only if they apply to be treated as a resident for tax purposes and if they file an income tax return (taxation by assessment).
Online services and forms
Who to contact
-
Luxembourg Inland Revenue (ACD)
- Address:
- 33, rue de Gasperich L-5826 Hesperange Luxembourg
Please click on the link above to find the competent department.
Luxembourg Inland Revenue
-
Luxembourg Inland Revenue (ACD)
- Address:
- 33, rue de Gasperich L-5826 Hesperange Luxembourg
Please click on the link above to find the competent department.
Related procedures and links
Procedures
Links
Further information
- Libéralités et dons sur le site de l’Administration des contributions directes
- Liste des organismes pouvant recevoir des dons fiscalement déductibles dans le chef des donateurs sur le site de l’Administration des contributions directes
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Summary of direct taxes on the website of the Luxembourg Inland Revenue
Pdf •
Legal references
-
Loi modifiée du 4 décembre 1967
concernant l'impôt sur le revenu
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Circulaire du directeur des contributions L.I.R. n°112/2 du 20 juillet 2009
Déductibilité des dons versés à des organismes ayant leur siège dans un autre État et reconnus d’intérêt général selon le droit de ce dernier
