IRS 2016 Expenses – Donations to Charity

The sixth and final article in a series of 6 providing guidance on Portuguese Tax Returns

Written by Dennis Swing Greene, Chairman and International Fiscal Consultant for euroFINESCOs.a.

IRS 2016 – Expenses 6-6

nº 6: Donations to Charity

Tax Credits for charitable gifts for individuals are based on the “Estatuto de Mecenato” (Patronage Statutes), which divides contributions according to the nature of the charity. The amount of the gift is enhanced for tax purposes by a stipulated percentage, then a tax credit of 25% is conceded on that amount.  Like other credits in 2016, the upper ceiling of the tax credit is limited, in this case to €100.  Donations above €200 should be made by cheque or bank transfer.

¹  organizations must be registered and recognized for any donations to qualify for tax credit.
²  up to 15% of tax


Question:    I give regularly to my church.  Can I get tax relief?

Finesco:    Yes, but only if you can substantiate your gift with a proper receipt.  In other words, if the donations that you put into the collection plate cannot be substantiated, they would not ordinarily qualify. On the other hand, if your church issues you a receipt, you can report 130% of that amount and receive a tax credit of 25% of that amount. It goes without saying that such a practice would be both in the best interest of the church as well as the donor.

Nevertheless, don’t forget to take into account the new upper limits to tax credits.

Question:    I give to charities in my home country. Can I claim these contributions in Portugal?

Finesco:    No, tax credits are only for Portuguese-based entities. If you are giving to an international organization, it must have an office in Portugal in order for the donation to qualify for a Portuguese tax credit.

This is the final article in the series