The Government proposes broader deductibility of donations

In accordance with a Government proposal, a taxpayer that donates cash to another party would be entitled to claim a higher deduction starting in 2027. As a change to current rules, there would many more types of donees that can receive donations. The changed legal provisions would apply to both individual and corporate taxpayers. 

So far, individual taxpayers can deduct donations of money to universities and colleges only. Corporate taxpayers can donate to universities and colleges, and additionally to associations and foundations designated by the Tax Administration that preserve the Finnish cultural heritage or support science or arts.

In the future, both individual and corporate taxpayers could make deductible donations not only to universities and colleges but also to associations and foundations whose activities support or promote physical activity, sports, the well-being of children or young people, social well-being or health. Donating would be deductible only if the Tax Administration had designated the association or foundation as a “qualified organisation”, to which donors can give cash and claim a deduction for it. The association or foundation would have to submit an application to the Tax Administration for approval as a qualified organisation.

An up-to-date list of qualified organisations would be kept by the Tax Administration. 

An organisation as a donee

There would have to be a decision issued by the Tax Administration to designate an association or foundation a qualified organisation before the donors could claim deductions. The qualified organisation status would involve the payment of a fee of €700. The decision would be valid for no more than 5 years. The conditions would include that the qualified organisation should have a money collection permit issued by the Police Board, and have at least one auditor. 

The Government proposal also envisages mandatory reporting of the tax-deductible donations received, so that the qualified organisations would have to provide the Tax Administration with annual information returns. For purposes of this reporting, the qualified organisation would have to gather a sufficient body of information on its donors.

An organisation as a donor

Both the Government proposal and the current rules maintain the principle that when a corporate taxpayer supports another entity or organisation by donating cash, it is assessed as a deduction from the donor’s income. There would be an 850-euro threshold of deductibility. If several donations are given to the one recipient during the tax year, the deduction could be claimed for the entire sum of money donated.

A corporate donor could reduce its taxable income by a maximum of

• €250,000 per year for donations to universities, colleges, or the foundations affiliated with them, 
• €50,000 per year for donations to associations and foundations that the Tax Administration has designated as qualified organisations.

A donor-by-donor basis would apply to the maximum amounts above. This is a change to the current rules, under which the amount of money received by the donee determines the maximum deductible amount.

The donor entity would include its deduction claim in the income tax return for the year, the same way as under the current rules.

Individual taxpayers making cash donations

Following the Government proposal, the deductions for a donation would be altered to tax credits, which directly reduce the tax payable. The current rules involve subtraction from the individual taxpayer’s earned income. Under the proposed new rules you could be provided with a tax credit equalling 30% of the cash amount donated, and the minimum donation should be at least €500. If several donations are given to the one recipient during the tax year, the credit would concern the entire amount. 

So far, individuals have only been entitled to a deduction from their income based on donations to universities, colleges and their associated foundations located in the EEA. As outlined by the Government proposal, donating to associations and foundations designated by the Tax Administration would entitle individual taxpayers to a tax credit. Universities, colleges and their university funds outside the EEA would also be included among the donees that entitle individual taxpayers to a tax credit.

• Donating to universities, colleges and foundations would make the donor entitled to a tax credit of max. €1,000,000 per year. 
• Correspondingly, donating to associations and foundations that the Tax Administration has designated as qualified organisations would entitle the donor to max 5,000 per year.

The donee would submit an annual information return to inform the Tax Administration of received donations. As a result, the data relating to donations would show on the donors’ pre-completed tax returns. In other words, the donors would no longer be allowed to claim a deduction during the tax year or to self-declare the related data when filing their pre-completed tax returns.

Read more

Government proposal HE 174/2026 vp (available in Finnish and Swedish, link to Finnish)