Donations to Ukraine: review of corporate tax treatment in Spain and Poland


Since the start of the invasion of Ukraine, many companies have made donations to support relief efforts after the invasion. In this commentary, we review the main tax implications of these donations for Spanish or Polish resident corporate donors.

In Spain:

  1. Under Section 15 of the Corporation Tax Act, donations do not trigger deductible expenses for corporation tax purposes.
  2. However, Law 49/2002, of December 23, on the tax regime of non-profit entities and tax incentives for patronage provides (in article 17) that donations are eligible for tax credits when certain conditions are met.
  3. Briefly, the requirements are that they must be outright irrevocable donations or contributions to one of the non-profit entities defined in the law itself; including gifts and donations of cash or other types of assets or rights. The tax credit base is the amount of donations, for cash donations, and the book value of assets and rights, for donations in kind. The law sets specific valuation rules for donations of real usufruct, securities and other property or rights. The value of the objects offered is limited in all cases to the fair market value of the goods or rights transferred at the time of their transfer. In addition, the tax credit base cannot exceed 10% of the tax base for the taxable period. Any amount over this limit can be used during the immediately following 10-year period. The tax credit, which will reduce the gross tax payable after deduction of relief amounts (bonuses), tax credits for double taxation and tax credits for the exercise of certain activities, is determined by calculating 35% of the tax credit base (remember that the normal rate of tax on companies is currently 25% and that the flat-rate minimum tax is equal to 15% of the tax base, less certain allowances, deductions and tax credits, but not the tax credit for donations itself ). If, during the two previous tax periods, qualifying donations were made to the same entity for an amount which, during each of the two periods, is equal to or greater than that made the previous year, the credit of tax due on donations to this entity the entity will be equal to 40%. It should be remembered for these purposes that donations to the same entity can have several uses and that, as we have mentioned, they must be donations pure and simple, that is to say without conditions. In other words, if donations have been made to the same NGO over several years, this increased tax credit may be applied, even if the NGO has used the donations for different projects or beneficiaries. Amounts that cannot be deducted during the period in which the donations are made can be used during the ten-year period immediately following.
  4. To be eligible for the tax credit, donations must be made to (among others) foundations, recognized associations of public utility or one of the non-governmental development organizations referred to in Law 23/1998 of July 7, 1998 , on international cooperation for development, provided that they have the legal form of a foundation or a public utility association (public utility association). And they can also be made to entities resident in other Member States of the European Union or the European Economic Area, with which the mutual assistance legislation allows the exchange of tax information as determined in the law. general on taxes, provided that they do not have a permanent residence. establishment in Spain and are equivalent to the foundations, associations or organizations mentioned above. These entities will have to fulfill certain conditions in order to be considered as non-profit entities and to be eligible for tax credits (relating, among other characteristics, to their objects, to the use of their income or to the obligation not to not carry out activities that do not correspond to the purposes set out in their statutes). Notable requirements are the need to be registered in the relevant register and compliance with various obligations related to accounting and reporting, as well as the obligation to prepare a specific economic report each year. To apply the tax credit, a certificate issued by the beneficiary entity is required with the minimum content defined in Royal Decree 1270/2003, of October 10, 2023, approving the implementing regulations of these patronage tax rules. Among other contents, the certificate must indicate that the recipient is one of the beneficiaries under Law 49/2002. And, in accordance with this, the beneficiary entities will have to declare each year to the tax authorities the certificates they have issued for the donations and donations received deductible or eligible for a tax credit, with identification of the donors, among other elements .
  5. These requirements should not prevent donations from being made to entities that are not resident in Spain and therefore may not meet any of the requirements described (including for them to be registered in Spain or to issue certificates with the specified minimum content). Indeed, the CJEU recognized in a judgment of 27 January 2009 (Case C-318/07) that “Article 56 EC precludes legislation of a Member State under which, as regards the donations made to organizations recognized as being of public utility, the benefit of a tax deduction is only authorized for donations made to organizations established in that Member State, without the possibility for the taxpayer to demonstrate that a donation made to a body established in another Member State satisfies the requirements imposed by that Member State’s legislation for the granting of such an advantage. And it made a similar observation in a judgment of June 16, 2011 (case C-10/10). It is nevertheless important to proceed with caution in these cases by obtaining the appropriate certificates for the donations and gathering the necessary evidence to show that the beneficiary entities are similar to those in Spain and are therefore eligible for the tax credit; essentially, because in these cases the recipient entities will not be required to periodically send information to the Spanish tax authorities about the donations.


  1. In general, all donations (in cash and in kind) made to one of the public benefit organizations, which provide socially viable services, for example assistance to victims of armed conflicts and wars in Poland and the foreign, are deductible from income/profit for tax purposes. In order to benefit from tax deduction on donations made, the recipient of the donation must be a charitable organization (included in the publicly available list of qualified organizations -OPB-) or equivalent organizations operating in Poland or EU countries. However, this deduction is currently not available on donations made directly to organizations based in Ukraine.

    The amount of the deduction cannot exceed 10% of taxable income in CIT and (depending on its nature – cash or in kind -) must be properly documented (i.e. bank transfer / relevant confirmations).

  2. On March 12, 2022, the Law on Assistance to Citizens of Ukraine in connection with an armed conflict on the territory of this country entered into force. The Special Purpose Law allows for favorable tax treatment of humanitarian aid expenditures incurred by corporations, in addition to the tax advantages mentioned above, although the possibility of simultaneously benefiting from both tax advantages for the same expenditure remains a open question. In particular, expenses related to the acquisition of goods or rights donated (donations in kind) to specific organizations / institutions for purposes related to the fight against the effects of hostilities on the territory of Ukraine are fully deductible for the donor. This provision constitutes an exception to the general tax rules, according to which the vast majority of donations do not give rise to the right to tax deduction (other than the allowances mentioned in article 1 above). This rule applies to in-kind donations made between February 24 and December 31, 2022 to qualified beneficiaries, i.e. mainly non-profit organizations such as foundations, associations (in particular those with status of public benefit organization or equivalent) operating in Poland or equivalent organizations operating under Ukrainian law, local governments or entities performing medical activities in Poland or Ukraine. In addition to the cost of in-kind donations, the cost of services rendered free of charge for the benefit of the above-mentioned qualified entities is also deductible, provided that the purpose of the service is to counter the effects of hostilities on the territory of Ukraine. The costs of gifts and free services mentioned above will not decrease the profitability of the particular taxpayer for the purposes of the so-called minimum corporate tax regulations, since they will not decrease (based on the exact provisions of the special objective law) are included in the corresponding calculation. Therefore, donations in kind or the provision of free services will not deteriorate the situation of the taxpayer concerned for the purposes of the corporate minimum tax. The aforementioned catalog of OAPs partially overlaps with that included in the special purpose law.

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