A CHANGE in the amount that corporations can assign from their corporate income tax to non-profit organisations has been postponed by one year after a vote taken by the Slovak parliament last December, the TASR newswire wrote.
Current law allows corporations to assign 2 percent of their income tax to non-profit organisations but only if they add a contribution from their own resources that is equal to at least 0.5 percent of their income tax. If they do not do so, they can assign only 1.5 percent of their due income tax to a non-profit group.
The planned change was to reduce the assignment to only 1.5 percent and also increase the amount that a corporation would need to add from their own resources to 1 percent beginning in 2013. The action taken by parliament postpones the change to 2014.
Under Slovak law individuals can also assign 2 percent of their due income tax to various kinds of non-profit and charitable organisation and there is no plan to change this.
The general idea presented by the government is to gradually reduce the corporate assignment to 0.5 percent of the due income tax and increase corporations’ direct voluntary contributions so that non-profits would receive 2.5 percent of a corporation’s due income tax.
Many non-profit and charitable organisations oppose the idea, concerned that this would significantly reduce donations from the corporate sector, noting that the cut in the assignment to 1.5 percent in 2011, if a corporation did not make the 0.5 percent voluntary contribution, had reduced the level of corporate donations flowing to non-profits.
“The share from paid corporate income tax has fallen from €37.5 million in 2009 to €23.5 million at the end of August 2011,” stated Milan Andrejkovič from 1. Slovenské Neziskové Servisné Centrum, an organisation providing information and consultancy to non-profits, as quoted by the SITA newswire last November. The number of corporations participating in designating part of their tax liability to non-profits fell from 30,000 firms in 2009 to 25,700 in 2011 and only 2,400 corporations made direct voluntary contributions in 2011, according to Andrejkovič.
4. Jun 2012 at 0:00 | Compiled by Spectator staff