Donors may apply the 45% deduction if they maintain or increase their contributions

Optimizing tax burden through donations to non-profit entities requires strict compliance with temporal and amount-based conditions. The Directorate General of Taxes (DGT) has recently clarified the requirements necessary to access the increased deduction rate in the Personal Income Tax (IRPF) return.

What the DGT has ruled

The advisory body has clarified that, to apply the 45 percent deduction on the amount exceeding 250 euros, two fundamental requirements must be met:

• Recurrence: Donations must have been made in the two immediately preceding tax periods in favor of the same entity.
• Stability or increase in amount: The amount of donations for the current and previous year must be equal to or greater than the amount from the immediately preceding year.

In the case analyzed, the DGT confirms that, when the recurrence condition is met with equal or greater amounts, the application of said increased deduction is appropriate in accordance with current regulations.

What this means for you

If you make periodic contributions to non-profit entities, the mere record of payments is not enough to access the maximum tax benefit. The regulations require a continuity that is not only temporal but also economic. If in a given year you decide to reduce the amount of your donation compared to the previous year, you will lose the right to apply the 45 percent rate on the amount exceeding 250 euros, even if you maintain the periodicity.

What is advisable to do

To ensure the use of this tax incentive, it is necessary to monitor the contributions made over the last two years. Before modifying the amount of a recurring donation, you should verify whether such a reduction will affect the application of the most favorable deduction rate. Each donation situation must be evaluated to confirm that the criteria of Law 49/2002 and the IRPF Law are met.