Under the Fiscal Code, the sponsoring economic operators benefit from tax incentives.
The sponsoring economic operators benefit from income tax deductions under certain conditions and limitations that are established by the fiscal code.
According to the New Fiscal Code in force as of January 1st, 2016, art. 25 Para. 4 let. i, sponsorship/patronage expenses and private scholarship expenses still remain non-deductible when calculating the profit tax. However, there is an increase in the minimum limit for the sponsorship amount, to be subtracted from the profit tax.
As a result, the economic operators can deduct from the owed profit tax, the value of the sponsorship within 5‰ (0.5%) of the turnover, but not more than 20% of the owed profit tax.
Art. 25 – The Fiscal Code
(4) The following expenses are not deductible:
1. i) sponsorship and/or patronage expenses as well as expenses for legally granted private scholarships; tax payers that perform sponsorship and/or patronage, under the provisions of Law No 32/1994 regarding sponsorship, as further amended and completed, and under the provisions of Law No 334/2002 on libraries, republished, as further amended and completed, as well as those who legally grant private scholarships, subtract the related amounts from the owed income tax to the minimum value level from the following:
2. the amount calculated by applying a 0.5% to the turnover; for situations where the applicable accounting regulations do not define the turnover indicator, this limit is determined according to the norms;
3. the amount representing 20% of the owed income tax.
The amounts that are not deducted from the income tax, according to the provisions of this letter, are reported in the following 7 consecutive years.
The recovery of these amounts will be done in order of their registration, in the same conditions, with each income tax payment term.
In order to perform a sponsorship under the aforementioned fiscal benefits, a written sponsorship contract is required, that specifies the object, the amount and the duration of the sponsorship period, as well as the rights and obligations of the parties involved.
If you are considering a sponsorship contract between your company and the Civic Alert Association, please contact us via e-mail at firstname.lastname@example.org. We will respond promptly with the required details.
Note: information valid for Romania only;