Income tax reduction, the main tax incentive for private donations, remains underused

How can we explain that the main tax mechanism supporting private donations—income tax reduction—remains relatively underused for significant donations, even though it allows for a six-year period of eligibility?

For Sophie GONSARD, Notaire at Althémis Le Vésinet, the answer undoubtedly lies in the failure to highlight the donation potential of each taxpayer and the limitation on the income taken into account. Taken together, these two factors do not encourage larger philanthropic gestures that could be made in the event of exceptional gains.

With examples and practical advice, this article aims to :

• provide a summary of the income tax reduction applicable to inter vivos transfers
• explain which income is taken into account when calculating the annual ceiling of 20% of the donation base eligible for the 66% tax reduction
• detail which tax the donation-related reduction applies to
• determine whether the tax reduction mechanism in Article 200 of the French General Tax Code applies only to cash donations.

This article is only available in French.