A donation for public benefit purposes is a form of social support that additionally allows for a reduction in income tax. It is important to know what conditions must be met in order to benefit from the tax deduction.
Who Can Receive a Donation?
Not every organization must have Public Benefit Organization (PBO) status for a donation to be deductible from income. It is important that the organization’s activities align with the public benefit purposes defined by law. Donations can be made to:
- Public benefit organizations,
- Associations of local government units,
- Churches and religious organizations,
- Social cooperatives,
- Foundations and associations (if they do not operate for profit).
Form of Donation – Cash or In-Kind?
- Cash donation – must be transferred in non-cash form (e.g., bank transfer, check). Cash donations are not deductible.
- Non-cash donation – requires a document confirming its value and the donor’s details. The recipient should provide a statement confirming acceptance of the donation.
- Targeted donation – transferred for a specific person through an organization, not directly.
What Is the Deduction Limit?
The total value of deductions for donations for public benefit purposes, religious worship, and blood donation cannot exceed 6% of income.
What Documents Are Required?
To benefit from the deduction, you must have:
✅ Proof of donation transfer – e.g., transfer confirmation or a document confirming the value of an in-kind donation,
✅ Recipient’s details – name and address of the organization,
✅ Recipient’s statement confirming acceptance of the donation (in the case of a non-cash donation).
These documents are not attached to the tax return but must be kept for 5 years in case of a tax audit.
How to Report a Donation?
The deduction is reported in attachment PIT/O, which must be attached to the PIT-37, PIT-36, or PIT-28 tax return.
