Corporate philanthropy: tax reduction cut to 40% on donations above €2 million

Article 134 of the 2020 Finance Act amends the tax reduction for corporate philanthropy (Art. 238 bis CGI). The share of donations up to €2 million remains at 60%, while the share above that threshold gives entitlement to a 40% reduction. Donations to organisations providing free meals, care, housing or basic necessities to people in difficulty remain at 60% and are not counted in the threshold. The alternative ceiling on donations rises from €10,000 to €20,000 (or 0.5% of turnover), and the cost taken into account for skills sponsorship is capped at three times the social security ceiling per employee. The measure applies to donations made during financial years ending on or after 31 December 2020.