Skills sponsorship involves a company making its employees available, during their working hours, or its infrastructures, to carry out missions of general interest for the benefit of endowment funds, associations, foundations or other eligible organizations. This form of corporate philanthropy enables companies to contribute to societal causes such as research, while directly involving their employees. Whether through the provision of infrastructure or employees, these contributions are valued at cost, and companies can benefit from a tax reduction. While skills sponsorship offers companies significant tax advantages, these benefits are subject to ceilings. The following details all the elements you need to know if you wish to contribute your infrastructure to our research teams, or involve your own teams in our schools' projects.
1. **General Tax Code (CGI)** :
- Article 238 bis**: This article is central to corporate philanthropy, defining the conditions under which companies can benefit from a tax reduction for their donations, including skills sponsorship.
Skills sponsorship is included in the form of services provided, valued at cost for the company.
2. **Circulars and Bulletins Officiels des Finances Publiques (BOFiP)** :
- **BOI-BIC-RICI-20-30-10-20**: Details the calculation methods and eligibility conditions for the tax reduction linked to donations made by companies. It also discusses the value of skills sponsorship.
- **BOI-IS-CHAMP-30-10**: Clarifies the conditions under which companies can benefit from the tax reduction for donations in kind, including the provision of services (skills sponsorship).
Skills sponsorship is valued at cost for the company, i.e. taking into account the loaded salaries of the employees made available. The tax reduction is equal to 60% of the amount of donations taken within the limit of 5‰ of the company's annual sales excluding tax. If this limit is exceeded, the excess can be carried forward to the following five financial years.
Companies are required to sign an agreement with the beneficiary organization, specifying the duration, purpose and terms of the assignment. Employees continue to benefit from their employment contract and associated benefits for the duration of the sponsorship assignment.
Skills sponsorship enables companies to contribute to public-interest projects by providing employees or infrastructure. Here's a closer look, with calculation examples for each case.
When a company makes infrastructure available, this may include premises, materials or equipment. This is valued at cost to the company.
**Example calculation** :
A company provides an equipped meeting room for an association for one week.
1. **Infrastructure cost** :
- Room rental cost (if rented to a third party): €1,000 per week.
- Cost of depreciation of equipment (proportional to the period for which it is made available): €200.
- Cost of ancillary services (cleaning, electricity, etc.): €100.
2. **Total value of provision** :
- Total = €1,000 (rental) + €200 (equipment depreciation) + €100 (ancillary services)
- Total = €1,300
3. **Tax advantage** :
- The tax reduction is 60% of the value of the donation, i.e. 60% of €1,300 = €780.
In this way, the provision of infrastructure enables the company to benefit from a tax reduction of €780.
When a company makes employees available to an association for specific missions, they are also valued at cost, including the loaded salary (gross salary + social charges).
**Calculation example** :
A company makes an employee available for a one-month assignment with an association.
1. **Employee cost** :
- Gross monthly salary: €3,000.
- Social security charges (estimated at 40% of gross salary): €3,000 * 40% = €1,200.
2. **Total value of provision** :
- Total = €3,000 (gross salary) + €1,200 (social charges)
- Total = €4,200
3. **Tax advantage** :
- The tax reduction is 60% of the value of the donation, i.e. 60% of €4,200 = €2,520.
The provision of this employee therefore entitles the company to a tax reduction of €2,520.
To benefit from these tax advantages, the company must provide supporting documents detailing the availability of the equipment. This includes:
1. **Sponsorship agreement**: Must be signed between the company and the association, specifying the nature, duration and terms of the loan.
2. **Financial justifications**: Must include detailed cost calculations (salary costs for employees, depreciation and operating costs for infrastructure).
3. **Mission report**: For employees, a report detailing the missions carried out and the time spent may be required.
Sponsoring skills enables companies to benefit from tax reductions, but these tax advantages are subject to certain limits.
1. **General ceiling** :
- The tax reduction is equal to 60% of the amount of the donation, including the value of the skills made available.
- This reduction is limited to **5‰ (5 per thousand) of the company's annual sales excluding tax**. For example, a company with sales of €10 million could benefit from a tax reduction on a maximum of €50,000 in donations (€10,000,000 * 5‰).
Starting with the 2020 Finance Act, a second limit has been introduced that may be more advantageous for some companies:
1. **Alternative ceiling of 20,000 euros** :
- Companies can benefit from the tax reduction for donations up to **20,000 euros**, if this amount is more advantageous than the ceiling of 5‰ of annual sales.
The company can choose the most advantageous ceiling between :
- 5‰ of annual sales excluding tax
- 20,000 euros
**Example 1**: Company with sales of 2 million euros
1. **Cap of 5‰ of sales** :
- 2 000 000 € * 5‰ = 10 000 €
2. **Alternative ceiling** :
– 20 000 €
**Choice of ceiling** :
- The company will choose the alternative €20,000 ceiling, as it is more advantageous than the €10,000 ceiling.
**Example 2**: Company with sales of 10 million euros
1. **Cap of 5‰ of sales** :
- 10 000 000 € * 5‰ = 50 000 €
2. **Alternative ceiling** :
– 20 000 €
**Choice of ceiling** :
- The company will choose the €50,000 ceiling, as it is more advantageous than the €20,000 ceiling.
**Case of a company with sales of €2 million that has made donations and made available services valued at €15,000:**
1. **Ceiling of 5‰ of sales**: €10,000
2. **Alternative ceiling**: €20,000
3. **Choice of ceiling**: €20,000
- Amount taken into account for tax reduction**: €15,000 (because below the chosen ceiling)
- Tax reduction**: 60% of €15,000 = €9,000
**Case of a company with sales of €10 million that has made donations and made available services valued at €60,000:**
1. **Ceiling of 5‰ of sales**: €50,000
2. **Alternative ceiling**: €20,000
3. **Choice of ceiling**: €50,000
- Amount taken into account for tax reduction**: €50,000 (the chosen ceiling)
- Excess amount carried forward**: €10,000
- **Tax reduction for current year**: 60% of €50,000 = €30,000
- Tax reduction for the following year (if the excess is used)**: 60% of €10,000 = €6,000.
2. **Surplus carryforward** :
- If the amount of donations exceeds this annual ceiling, the excess can be carried forward over the following five years. In this way, companies can spread the deduction of their excess donations over several tax years.
Companies must ensure that they comply with the documentary requirements to justify their tax reduction claims:
1. **Sponsorship agreement**: Must be detailed and signed between the company and the beneficiary organization.
2. **Financial documents**: Must include precise cost calculations and proof of the value of the services provided.
3. **Monitoring and reporting**: Assignments carried out by employees must be documented and closely monitored to prove their impact and selfless nature.
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