Gabriel Attal unveils at Les Echos the expected reform of the tax system on corporate sponsorship. To prevent abuse, the government will revise downward (from 60 to 40%) the tax exemption rate for donations over 2 million euros. This should generate 80 million euros in savings for the state budget by 2021. In addition, the Secretary of State notes a rebound in donations to associations as part of the IFI 2019 campaign.
In mid-July, the government made the first cuts in certain tax loopholes, but leaving patronage aside. Are you going to reform this system?
Reform it to ensure its sustainability, yes. Sponsorship is not a tax loophole. It is a formidable tool which has proven itself in terms of financing the general interest, but also of accelerating the professionalization of associations. It is also one of the main levers of social innovation: many devices recently launched by the State had previously been the subject of experiments financed by the private sector!
However, questions are regularly asked, examples of abuses have been highlighted by the Court of Auditors or parliamentary reports. These do not in any way summarize what patronage is, but they have been able to cause trouble. If patronage becomes considered a tax optimization mechanism, it will end up being called into question in its very principle, as was the case at the time of Notre-Dame. A big bang would destabilize our exceptional model. The status quo would suggest that abuses are allowed. What we want is therefore a clearer framework.
This tax deduction mechanism is not a tax niche?
Not in my eyes. A tax niche is a tax credit linked to an expense immediately useful to the person who incurs it. Patronage certainly gives rise to a tax deduction, but the expense is not directly useful to the company. It finances the general interest. Our objective is that patronage does not become a tax niche, that is why we must pragmatically prevent abuses.
How are you going to amend the device?
We have found a point of equilibrium. Companies that donate more than 2 million euros per year will see their tax exemption rate drop from 60% to 40% for sums that exceed this threshold. This will only concern 78 large companies whose donations now exceed this amount.
Will there be exemptions from this new threshold?
The associations of aid to the most deprived known as “Coluche law” will not be concerned. The 60% rate will continue to apply for all donations made to them. This decision reflects our political priority of social justice, in line with the poverty plan presented by the President of the Republic in September 2018.
What savings will these measures allow?
I repeat: the main objective here is not to save money, but to ensure the sustainability of a mechanism of generosity. If we had savings for only compass, since this year we would not have allowed VSEs and SMEs to benefit from more tax exemption for their donations! It is estimated that the measures will reduce tax expenditure by around 80 million euros per year, from 2021. But sponsorship will remain dynamic and therefore tax reduction as well. The tax expenditure increased by 70 million euros in 2018, in particular for the benefit of SMEs!
On certain compensation granted to patrons, such as the provision of premises, are you going to review the rules?
Certain situations clearly raise questions. The reporting obligation of counterparties integrated into the 2019 Finance Law will allow us to have more precise data on the subject. It is only on the basis of objective and consolidated elements that we could consider additional supervision measures, but this is not immediately relevant.
Should we expect a drop in donations from these large companies?
I am confident in their ability to maintain their donations, and to let it be known! We can see that taxation is no longer the main driver of their patronage. Today, more than one in three companies do not claim the tax deduction to which they are entitled for their donations! They get involved because they believe they have a social responsibility, because consumers expect it, and because their employees – especially young people – are asking them more and more. This is why I am so involved with SMEs and mid-cap companies, which are less involved in sponsorship today. My message: seize new leeway, sponsorship is also a response to social issues in our territories.
Are you also going to change the conditions for skills sponsorship?
Yes, because, here again, it is a question of avoiding abuses in order to better guarantee the future of this formidable device for associations as well as companies. Can we accept that some companies tax exemption of salaries of the order of 20,000 euros per month by making employees available and thus avoid paying for a separation? No, solidarity cannot cover such remuneration. The salaries tax-exempted in skills sponsorship will therefore no longer be able to exceed three social security ceilings, or approximately 10,000 euros gross per month.
Where is your project to reform the hereditary reserve?
I want to boost a new dynamic so that great fortunes give more. This requires work on the hereditary reserve which, in the current state, restricts donations and bequests to associations and foundations. Some of them even prefer to forgo donations offered to them for fear of having to then reimburse the heirs at the time of an inheritance. While guaranteeing the rights of the heirs, my wish is to move towards a relaxation. With Nicole Belloubet, we are awaiting the conclusions of a parliamentary mission this fall to move forward. There is obviously no question of increasing inheritance tax.
The associations have denounced in recent months a decrease in donations due in particular to the reform of the ISF …
The 2017-2018 tax changes – creation of the IFI, withholding tax, etc. – were able to generate a certain wait-and-see attitude on the part of taxpayers who donate. And, it weighed on the budgets of associations. The challenge is to organize the rebound of the donation. There is no reason why the strong growth observed over the past ten years should not resume. The very first estimates show an increase of around 10% to 15% in donations as part of the IFI 2019 campaign.
I also want to support this dynamic by mobilizing the whole of society. We are going to increase the number of initiatives, such as the organization of “Giving Tuesday” on December 3, which in the United States corresponds to the donation day following “Black Friday”. In serious situations, the French always find themselves around solidarity. This fiber says a lot about what we can build in society.