Will donations be tax deductible? Revenue Administration Explained with Detailed Example

The Revenue Administration of the Ministry of Treasury and Finance reported that donations and aids are deducted from the tax base, not from the tax.

The statement made on the social media account of the Revenue Administration is as follows: “Donations and aids are deducted from the tax base, not from the tax. It is seen that the shares on social media that donations and aids are tax deductible continue. It was deemed necessary to re-explain the subject in order to inform the public and taxpayers correctly. Income and Corporate Tax Laws allow the deduction of donations and aids from the income obtained, from the income of the institution, under certain conditions. Tax deductions and tax deductions are completely different concepts.

If donations and aids meet the necessary conditions, they are deducted from income and earnings for corporations in determining the tax base of the relevant year. The remaining amount as a result of this discount is taxable. To explain the issue with a simple example; When an institution with an income of 100 thousand TL donates 20 thousand TL to AFAD, it will deduct 20 thousand TL from its earnings. A corporate tax of 80 thousand TL, calculated at the rate of 20 percent over the remaining 16 thousand TL, will be paid. In summary, the amount of tax withheld is 4 thousand TL.”