{"id":11510,"date":"2024-11-06T21:25:42","date_gmt":"2024-11-06T20:25:42","guid":{"rendered":"https:\/\/www.augelegalfiscal.com\/?p=11510"},"modified":"2024-11-07T15:14:40","modified_gmt":"2024-11-07T14:14:40","slug":"donations-dana-valencia","status":"publish","type":"post","link":"https:\/\/www.augelegalfiscal.com\/en\/donations-dana-valencia\/","title":{"rendered":"Donations to help those affected by DANA could be expensive &#8211; Treasury already wants its part"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The recent floods in Valencia have mobilized hundreds of people to help affected residents rebuild their lives. However, many of these generous donations between people without family ties can lead to <\/span><strong>unexpected tax consequences that both donors and recipients are unaware of<\/strong><span style=\"font-weight: 400;\"><strong>.<\/strong> The Inheritance and Donations Tax (ISD) in the Valencian Community applies significant taxation to such donations, especially when they are made between people with no familial relationship, a regulatory aspect that, in effect, <\/span><strong>limits private initiatives and encourages aid to be channelled through specific entities.<\/strong><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #8f2b2f;color:#8f2b2f\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #8f2b2f;color:#8f2b2f\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.augelegalfiscal.com\/en\/donations-dana-valencia\/#%C2%BFWhat_is_the_ISD_and_how_does_it_affect_donations_between_non-relatives\" >\u00bfWhat is the ISD, and how does it affect donations between non-relatives?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.augelegalfiscal.com\/en\/donations-dana-valencia\/#Examples_of_how_it_can_impact_DANA_donors\" >Examples of how it can impact DANA donors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.augelegalfiscal.com\/en\/donations-dana-valencia\/#Alternatives_to_minimize_the_tax_impact\" >Alternatives to minimize the tax impact<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.augelegalfiscal.com\/en\/donations-dana-valencia\/#Donations_made_by_a_company\" >Donations made by a company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.augelegalfiscal.com\/en\/donations-dana-valencia\/#Stay_informed_and_avoid_tax_surprises\" >Stay informed and avoid tax surprises<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"%C2%BFWhat_is_the_ISD_and_how_does_it_affect_donations_between_non-relatives\"><\/span><b>\u00bfWhat is the ISD, and how does it affect donations between non-relatives?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The ISD taxes donations and inheritances based on the relationship between the donor and the recipient. When a person receives a donation from someone with no family ties, like a friend or acquaintance, the tax rate is significantly higher, reaching up to 70% of the donated amount in the Valencian Community. Ultimately, this rule forces non-family members who want to help to face significant tax burdens, thus encouraging donations through authorized charities or foundations.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Examples_of_how_it_can_impact_DANA_donors\"><\/span><b>Examples of how it can impact DANA donors<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Imagine a person donates 10.000 euros to a friend affected by the DANA. Since the recipient is not related to the donor, they could be required to pay up to 1.700 euros in taxes. Depending on the donation amount and personal circumstances, as much as <\/span><b>7 out of every 10 euros<\/b><span style=\"font-weight: 400;\"> donated could go towards taxes. This not only reduces the effectiveness of the aid but also places an unexpected tax burden on the recipient at a critical time. Thus, the regulation indirectly acts as a deterrent for direct donations and aims to channel donations through State-authorized entities (public-interest foundations and associations).<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Alternatives_to_minimize_the_tax_impact\"><\/span><b>Alternatives to minimize the tax impact<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To avoid this burden, several alternatives benefit both donors and recipients:<\/p>\n<h3><b>Donations through ONG or foundations<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Officially recognized non-profit organizations and foundations are exempt from the ISD, and donors can deduct up to 80% of their contributions on their personal income tax if these organizations are accredited. This approach not only reduces the tax burden but also aligns with the regulation promoting aid distribution through controlled institutions.<\/span><\/p>\n<h3><b>Usage assignments and in-kind donations<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">In some cases, the transfer of goods without compensation or in-kind donations can help reduce the impact of the ISD. However, these types of donations are subject to restrictions and are often more effective when made through specific entities.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Donations_made_by_a_company\"><\/span><b>Donations made by a company<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If a donation is made by a company to an individual, the tax impact is doubly burdensome. In addition to the ISD impact on the recipient, <strong>t<\/strong><\/span><strong>he donation will not be tax-deductible for corporate tax purposes<\/strong><span style=\"font-weight: 400;\"><strong>.<\/strong> To limit this impact, it is necessary once again for the donation to be made to entities that comply with Law 49\/2002 (foundations and associations declared to be of public utility).<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Stay_informed_and_avoid_tax_surprises\"><\/span><b>Stay informed and avoid tax surprises<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Donations are a great way to help, but understanding the tax implications is crucial to avoiding problems. The current Spanish regulation, especially in the Valencian Community, restricts private initiative and control.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Before donating, consult a tax advisor to ensure that your aid reaches its destination effectively. While the current regulation may aim to ensure transparency in aid, your good intentions could be taxed if not managed properly.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The recent floods in Valencia have mobilized hundreds of people to help affected residents rebuild their lives. However, many of these generous donations between people without family ties can lead to unexpected tax consequences that both donors and recipients are unaware of. The Inheritance and Donations Tax (ISD) in the Valencian Community applies significant taxation [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":11528,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[105],"tags":[],"class_list":["post-11510","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts\/11510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/comments?post=11510"}],"version-history":[{"count":2,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts\/11510\/revisions"}],"predecessor-version":[{"id":11521,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts\/11510\/revisions\/11521"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/media\/11528"}],"wp:attachment":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/media?parent=11510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/categories?post=11510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/tags?post=11510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}