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Income tax assignment

APPROXIMATELY 160,000 taxpayers, or 14 percent of all the taxpayers that submitted tax returns for 2012 by the end of March this year, assigned a portion of their income taxes to qualifying charities, NGOs and other groups, the TASR newswire reported on May 20.

APPROXIMATELY 160,000 taxpayers, or 14 percent of all the taxpayers that submitted tax returns for 2012 by the end of March this year, assigned a portion of their income taxes to qualifying charities, NGOs and other groups, the TASR newswire reported on May 20.

“Corporate entities and private individuals put in their tax returns that they want to assign to non-governmental and non-profit organisations, foundations, civic organisations and others a total of almost €30 million,” said Patrícia Macíková, spokesperson for the Financial Administration, as quoted by TASR.

This sum is not final and will increase with income tax that is assigned in tax returns which employers process on behalf of their employees.

Corporate entities were able to assign 1.5 percent of their paid corporate income tax. To increase their assignment to 2 percent, they had to allocate the equivalent of 0.5 percent from their profits.

Private individuals could assign 2 percent of their income tax, while those who had volunteered at least 40 hours of their time in 2012 were able to assign 3 percent.

The number of organisations entitled to receive assigned income or corporate tax continues to grow. In 2002 they numbered about 4,000, while this year taxpayers could choose from among 11,000. The total amount assigned has varied. It began with €3 million and peaked at €55 million in 2009. Since then the aggregate in assigned taxes has decreased; in 2011 it amounted to just over €44 million. The sum assigned has decreased because of falling company profits, squeezed by the current economic situation, and because of the changed assignment scheme which requires firms to match part of their assignment with a contribution from their profits if they want to assign the full 2 percent.

According to data from the Financial Administration cited by the Hospodárske Noviny daily, only 1 in 16 companies allocated money from their profits for this purpose last year. As a result, companies assigned 25 percent less than they did in 2011. In 2011 they assigned €26 million; in 2012 it was only €20 million.

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