45 % tax reduction for donations made by individuals: new formalities

According to Article 145/33 of the Income Tax Code (hereafter « ITC »), a tax reduction is granted for donations to listed organisations recognised by the competent authority.

The tax reduction amounts to 45 % of the donations (up to a maximum of 10 % of the donor’s net income).

The conditions to benefit from the tax reduction are as follows:

• the amount of the donation must be at least 40 euros, per calendar year and per organisation (it may be composed of several payments from the same donor);
• the donation must be made to a recognised organisation;
• the organisation must issue a tax certificate for the donation received;
• the donation must be made in cash (not in kind);
• the donation is not made for consideration.

The tax certificate must meet formal conditions and must contain the following information:

• calendar year for which the certificate is issued;
• order number;
• full details of the organisation;
• full name and address of the donor;
• amount of the donation, specifying that it is final and irrevocable.

Regarding the donor’s details, since 1st January 2024 it is mandatory to mention the individual donor’s national number.

The law of 28 December 2023 has introduced a new Article 323/3 into the ITC, which states (free translation):

“ § 1.     When an organisation referred to in Article 145/33, § 1, subparagraph 1, 1° to 4° issues a certificate in order to benefit from a tax reduction for donations, it shall send the relevant data to tax authorities electronically each year.

The electronic transmission referred to in subparagraph 1 must be carried out before 1st March of the year following the calendar year to which the certificate relates, and for the first time before 1st March 2025.

§ 2.        The organisations referred to in Article 145/33, § 1, subparagraph 1, 1° to 4° are exempt from the annual electronic communication obligation provided for in paragraph 1 for as long as they do not have the IT resources necessary to fulfil this obligation.

§ 3.        The date communicated by the bodies referred to in Article 145/33, § 1, subparagraph 1, 1° to 4° are:

1° calendar year for which the certificate is issued;

2° order number of the certificate;

3° statutory name, address of the registered office and the business number of the recipient organisation;

4° surname, first name, identification number in the National Register of Natural Persons or, where applicable, the identification number in the Crossroads Bank of Social Security or the business number in the Crossroads Bank for Entreprises for legal entities and companies, as well as the address of the donor;

5° the amount of the donation and confirmation that is has been made definitively and irrevocably. 

§ 4.        For the sole purpose of applying paragraph 1, the organisations concerned are authorised to collect, process and communicate the identification number to the National Register of Natural Persons. 

Where the aforementioned identification number is already in possession of the bodies concerned for other purposes, it may be used for the application of paragraph 1. 

§ 5.        Without prejudice to the retention necessary for further processing of archival purposes in the public interest, for scientific or historical research purposes or for statistical purposes referred to in Article 89 of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive (EC) 95/46, the data received by the Federal Public Service Finance pursuant to paragraph 3 shall not be kept for longer than is necessary with regard to the purpose for which they are collected, with a maximum retention period that may not exceed 10 years from the receipt of such data, with the exception of cases where an appeal or legal proceedings are still pending at the expiry of that period”.

This provision applies to donations made as from 1st January 2024.

As regards donations received from individual donors up to 31 December 2023, the Federal Public Service Finance (hereafter “FPS Finance”) announces on its website that organisations can already mention the national number and that they can collect this data on the basis of the aforementioned Article 323/3, § 4 of the ITC.

This is not mandatory; until 31 December 2023, there is no legal framework requiring organisations to mention the national number on tax certificates.

Article 323/3 of the ITC only came into force on the date of publication of the law of 28 December 2023 in the Belgian Official Journal i.e. 29 December 2023, and applies to donations made on or after 1st January 2024 (Article 69 of the law of 28 December 2023).

For the period prior to the entry into force of the law, it is legitimate to wonder whether organisations are legally entitled to collect national register number of their donors.

Furthermore, on 10 November 2023, a parliamentary question was addressed to the Minister of Finance regarding the national register number to be mentioned on the certificate. The model certificate, as available on the FPS Finance website before 1st January 2024, requires the donor’s national register number to be mentioned.

The question is the following (free translation): “Experience in the field tells us that associations often do not have access to the donor’s national register number. However, they can ask the bank for the donor’s postal address and then write to the donor the request for its national register number. However, this entails a significant administrative burden for associations. Moreover, associations that register the national register number run the risk to reveal a lot of information in the event of data leak. Could you clarify whether recognised associations must request the national register number? If so, why? If so, what is the legal basis for such obligation? If so, given the significant administrative burden, are there any plans to change this situation or not, and for what reasons?”

The Minister of Finance replied that the tax certificate has indeed been modified at the beginning of 2023 and that a field has been provided to mention the national register number. However, he notes that "at the moment, there is no legal framework in place and no obligation”. 

From 1st January 2024, there is now an obligation to provide the national register number and a legal framework has been adopted through the insertion of Article 323/3 in the ITC.

For donations made before this date, the organisation is under no legal obligation to mention the national register number of its individual donors on the certificates.

However, the FPS Finance recommends mentioning this number, as it would ensure that taxpayers which are entitled to the tax reduction can claim it.

It should also be noted that non-resident donors who work in Belgium may have a ‘bis’ number which can be used on tax certificates.

In any event, the organisation will no longer be able to issue certificates to individual donors without national number or bis number for donations made as from 1 January 2024.

Olivier Willez

Partner

Charlotte Watteyne

Senior Associate