Philanthropy encouraged as means of reducing tax liability

Giving generously to charity can help Irish businesspeople greatly reduce their tax burden by taking advantage of the Government’s tax rebate scheme, it has been claimed today.

“As tax relief options reduce Ireland’s wealthy are looking to philanthropy as one of the more appealing options for offsetting against their income,” said Tina Roche, chief executive of The Community Foundation for Ireland, an organisation which provides guidance and advice to philanthropists.

“While research and anecdotal evidence suggests that people generally give because they feel a pull to a particular cause, tax rebates clearly provide some extra incentive to donate.

“Tax rebates for charitable giving encourages people to give back to their communities and as the size of the donation increases, so does the impact of tax incentives.”

For those considering establishing a fund worth €100,000 the tax saving is worth €41,000 while the net investment from the donor is €59,000. Similarly, if a donor wishes to set up a fund worth €500,000 the tax saving is €205,000 while the investment is €295,000.

The deadline for self-assessed income tax payers to file their returns is October 31.

“With more than a decade of wealth accumulation behind us Ireland has a unique opportunity to address the scale of poverty and inequality in our society at a time of spectacular wealth,” said Roche.

“If our wealthiest citizens contributed at the same level as Britain we would more than double our rate of giving to over €1bn annually and our entire not-for-profit sector would see a huge expansion in the opportunities available to them”.