Have you ever thought how the world would look like, if all the things were made half? Or how it would look like if they were made on the fourth? Based on the Sponsorship Law and on the Tax Code, trade companies could have had direct, in the year of 2015, more than EUR 375 million to the non-governmental sector. Actually, only 23 percent of the companies who paid the tax on profit used this tax facility, although it doesn’t involve any cost for the tax payers. Even if the total directed amount has increased by 26 percent compared to the previous year, it only represents 42 percent of the total amount that could have been directed to the non-governmental sector.*
Based on figures exclusively provided by the National Agency for Fiscal Administration (ANAF), the HOSPICE Casa Sperantei Foundation, EY Romania and the Association for Community Relations presented, on the occasion of the conference held on Wednesday, November 9, concrete data related to the way of using “the 20% tax facility” in Romania.
“According to the data provided by ANAF, 150,541 trade companies have reached profit in Romania, in 2015. If all of them would have directed the maximum amount provided by the law to the non-profit sector, more than EUR 375 million would have been able to support key areas such as health, environment and education. However, only 34,811 of these companies, representing 23 percent of the total, registered sponsorship, patronage or private grants expenses, the total directed amount to NGOs being of almost EUR 157 million”, stated Laszlo Bodor, Fundraising and Communication Manager at HOSPICE Casa Sperantei.
The percentage of the companies using this tax facility is still very low, but the indicators are in growth compared to the previous year:
Indicator 2014 2015
No. of companies who reached the profit 137,909 150,541
No. of companies who registered sponsorship, patronage or private grants expenses
% 21% 23%
Amounts registered for sponsorship, patronage, private grants (RON) 554,242,639 697,852,064
* Potential estimated by HOSPICE Casa Sperantei, EY Romania and ARC, based on the analysis of the data related to the turnover and the tax on profit for more than 129,000 companies and the extrapolation of the obtained results to the data provided by ANAF
Starting from 2016, sponsorships are more advantageous: The minimum limit has been increased from 0.3% to 0.5%
Also within the mentioned conference, Mihaela Vasilescu – EY Romania Tax Manager – announced that 2016 brought important news. More specifically, instead of 0.3%, the companies can deduct from the tax on profit the amounts granted as sponsorships, in the limit of 0.5% of their turnover. This change has a positive impact on the amounts that can be directed to the non-governmental environment.
Gabriel Sincu – EY Romania Tax Executive Manager – explained the mechanism and the legislative framework through which a trade company can benefit from the facilities provided by the Sponsorship Law and by the Tax Code. “I encourage the use of the ‘20% tax facility’, I appreciate that it’s a simple and honest way by which trade companies can invest in the non-profit sector and, therefore, in the society, without any cost. Ernst&Young can provide free consultancy to all those who wish to use this facility. Only together we can make the desired change.”
The whole process, along with the necessary steps, is available for all the companies at 20.hospice.ro, in the section “Initiative”.
Social services, health and education – the most supported areas of activity
In his turn, Catalin Gheorghe, Program Coordinator at the Associations for Community Relations revealed the results of a survey of Romanian trade companies, related to the companies’ behavior and habits regarding the support of the non-profit sector by using the tax facility.
“The survey was conducted on a sample of 526 Romanian companies, which is representative for the companies that can benefit from this tax facility, using the CATI method, and its results indicated that the average value of the sponsorship annually granted is relatively small (RON 16,000), being established by the turnover and the low profit of the respondent companies. The most supported areas of activity are the social services, health and education, while on the last places are civic education and environmental and animals’ protection”, he stated.
Based on the Sponsorship Law and on the Tax Code, increasingly more companies direct funds to the non-profit sector, because they wish to improve the community life conditions, but this thing is strategically and coherently performed only in a small number of cases. Improving the sponsorship practice and increasing the use of these tools could open tremendous development opportunities.
HOSPICE Casa Sperantei, a non-profit organization established in 1992 at Brasov, introduced the concept of palliative care in Romania. HOSPICE is the most important foundation in Romania providing free specialized services of this kind.
The organization has two centers with integrated services, in Brasov and Bucharest, as well as mobile teams in Fagaras and Zarnesti, for the care of persons diagnosed with incurable diseases. HOSPICE has developed complete palliative care services, provided in day centers, in outpatients and own units for inpatient, at the patients’ domicile and in the partner hospitals. In the 24 years of existence, HOSPICE provided relief and hope for more than 20,000 children and adults with incurable diseases.
HOSPICE Casa Sperantei develops the palliative care at the national and international level by informing people, by educational programs dedicated to professionals, to patients and to the community, as well as by improving the related legislation.
For more details, please access www.hospice.ro.
EY Romania is one of the most important professional services companies worldwide, with 230,000 employees in more than 700 offices in 150 countries, and with an income of approx. USD 29.6 billion in the tax year ended at June 30, 2016. EY network is the most integrated at the global level and the resources within it help the company to provide its customers with services by which they can benefit from the opportunities across the world. In Romania, EY is one of the leaders on the professional services market since its establishment, in 1992. The more than 700 employees from Romania and Republic of Moldova provide integrated services of audit, fiscal consultancy, assistance in transactions and business assistance services to multinational and local companies. EY has offices in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau.
In 2014, EY Romania joined the only worldwide competition dedicated to the entrepreneurship, EY Entrepreneur Of The Year. The winner of the local edition represents Romania in the world final taking place annually on June, at Monte Carlo. In the world final, the granted title is World Entrepreneur Of The Year.
More details on : www.ey.com
The Association for Community Relations (ARC) supports philanthropy in Romania since 2003. ARC teaches NGOs how to transparently attract local funds in a manner that respects people which they help and on which they can rely for a long term, helping companies and donors to find the organizations and causes that fit them best and to follow what happened with the money.
More details at: www.arcromania.ro