Companies in France don’t have to return previously deducted value-added tax on equipment such as respirator masks and hand sanitizer that they donate to hospitals.
The clarification is one of the steps the country is taking to respond to the coronavirus pandemic.
The institution receiving the donation is also exempt from certain reporting requirements, the French government said Tuesday. But the company making the contribution must keep documentation stating when it made the donation, to whom, what it donated, and in what quantity.
- One section of France’s tax code provides that, if a company gives away an asset, or sells it for significantly below its actual value, the company must return any tax that it has previously been able to deduct for that asset, or for any component part of that asset. But if the donation is made in the public interest, the deducted tax doesn’t have to be returned.
- The new exemption applies to companies’ donations of materials to health institutions, social institutions, and social-medical institutions that care for the elderly, the handicapped, or those suffering from chronic illnesses. It also applies to donations to health professionals, state agencies, and local governments.