Donating to the museum Beelden aan Zee is becoming even more attractive
The collection and exhibitions of the museum Beelden aan Zee are unique in the Netherlands and of very high quality. The museum wants to continue to expand its special collection of contemporary sculpture. Images that the museum wants to acquire are often very expensive. The same applies to the exhibitions. Therefore the museum appeals to private benefactors to contribute to the collection and the organization of exhibitions through donations, gifts, bequests and legacies. This is not only about large amounts; small amounts are also more than welcome.
As of January 1st, 2012, the Geefwet, a gift and inheritance tax act regarding charitable giving in the Netherlands, has made it even more attractive to donate to the museum Beelden aan Zee. With this act, donations to cultural institutions such as the museum Beelden aan Zee are more fiscally attractive. In concrete terms, this means that, after deductions, a donation of €1.000 per year would cost only € 350 (assuming an effective tax rate of 52%). The duration of the Grant Act has been extended to January 1, 2019.
Certain criteria apply to invoke the benefits of the Grant Act. See an overview of the most important questions:
1. What is the Geefwet?
With the Geefwet there is an extra incentive added to the gift deduction in income tax and corporation tax for donations to Cultural ANBIs * by means of a multiplication factor (multiplier) of 1.25. This means that the amount that can be deducted is 25% more than the gift itself.
* Cultural Public Benefit Institution (the museum Beelden aan Zee has this status).
2. During which period can I use the extra gift deduction in the Geefwet?
The multiplier came into effect on 1 January 2012, resulting in an increased gift deduction. This increase applies to donations made up to and including 31 December 2019.
3. Who does the Geefwet apply to?
The benefits of the Geefwet, such as the increased gift deduction for a gift to a Cultural ANBI, apply to all taxpayers. The amount of the gift deduction, however, depends on the amount of aggregate income, the amount of the gift and whether it is a one time or a periodic gift.
4. What is the difference between a periodic gift and a one-time gift?
A periodic gift is a regular gift in the form of fixed and periodic payments made during one’s lifetime. As of January 2014, a notarial deed is no longer required in order to make a periodic gift. You can contact us regarding periodic gifts via firstname.lastname@example.org. A periodic gift must run for at least 5 years and be paid at least annually. In the case of a periodic gift, the full term is deductible. As a result, there is no deduction threshold and no deduction ceiling.
For example: If a periodic gift is made of 5 x € 1.000 over five years, € 1.250 (€ 1.000 x multiplier of 1.25) is deductible from income without this deduction being limited by a threshold or ceiling.
A one-off gift that is made within a year is subject to the deduction threshold and the deduction ceiling. The deduction threshold is the highest of € 60 or 1% of the aggregate income (total income in box I, II and III). The ceiling is 10% of the aggregate income. The ceiling may be increased with the additional deduction of 25%.
For example: Suppose the aggregate income is € 50.000 and a one-time gift of € 1.000 is made. The donation considered for the calculation of the deduction is 125% of the original donation. In this example it would thus be € 1.250. The 1% deductible threshold of the € 50.000 would thus be € 500. This means that the deductible is € 1.250 - € 500 or € 750. The ceiling is 10% of € 50.000 plus the additional deduction of 25% (€ 250) is € 6.250, so the gift stays under that.
Conclusion: the difference between a periodic gift and a one-time gift is in the gift deduction. A deduction threshold and ceiling apply to a one-time gift. These do not apply to a periodic gift. In both cases, the 25% increase is applied to a maximum donation of € 5.000. This means that with a gift of € 5.000 the increase amounts to € 1.250. The total deductible is € 6.250.
5. Do the benefits of the Geefwet also apply when donating objects?
The multiplier can also be used for donating objects or donating in kind. It is simply applied to the appraised value of the object. The 25% increase is applied again over a maximum of € 5.000.