This tax relief known as the “Art Bonus” is available to individuals, institutions and companies who support Italian cultural heritage by making financial donations.
The Art bonus consists of a tax credit equal to 65% of the donation subject to the following annual limits:-
- 15% of taxable income, for individuals and non commercial entities;
- 0.005% (five per thousand) of gross revenues for businesses.
The tax credit due must be divided into three equal annual instalments and used to offset the taxes due over the three years or accounting periods following the year in which the donation is made.
For businesses the tax credit can be used as a set-off against other taxes by means of the standard F24 form, used for payments of taxes and social security contributions. Any excess at the end of the three year period can be carried forward to future periods.
For Individuals and non commercial entities the tax credit needs to be claimed via the annual tax return starting with the return for the year in which the donation was made. Again the tax credit must be spread over three eyars in three equal instalments with any excess being offsetable without limit in future years in the presence of sufficient taxable income.
Art Bonus Example
John is a pensioner resdient in Italy. His pension is Euro 19,000 per annum and he pays tax on that of Euro 3,300.
If he makes a donation of Euro 1,000, he will get a tax credit of Euro 650.
That will save him tax of Euro 216 each year for three years.
In practice, his donation to Italian art and culture of Euro 1,000 costs him, in cash terms, only Euro 350.
The maximum amount he can donate, and still get tax relief, is Euro 2,850.
In order to take advantage of the tax relief the donation must be made otherwise than in cash – ie. by bank transfer, post office payment , credit/debit card, and cheque will do nicely.
The tax relief is not available for donations made in favour of ecclesiastical bodies except for donations in favour of buildings of cultural interest used for worship and located in defined municipalities affected by earthquake.
More information is available on the Italian government website, which contains a useful searchable list of entities that can receive donations under this scheme.