Proposal to extend the increased limit for the deduction of donations

Currently, the Law on Tax Measures in the Context of the Conflict in Ukraine allows the value of donations up to 30% of the tax base to be deducted from the tax base. This option applies to both individuals and legal entities for the tax years 2022 and 2023. It also continues to apply that in the case of a non-monetary donation to Ukraine, individuals and legal entities can choose whether to use the donation as a deductible item from the tax base or whether to apply it directly as a tax deductible expense.

A proposal to extend this increased 30% limit on the deductibility of donations is currently in its third reading in the Chamber of Deputies. Once approved, it will be possible to claim the increased tax deduction for gifts until 2026 (for legal entities until the period ending 28 February 2027).

The increase in the limit for the deduction of gifts to 30% of the tax base will apply to all gifts made. As a result, this increased limit will also apply to donations made in connection with this year's floods.

We will continue to monitor the approval process. If you have any questions, please do not hesitate to contact the PKF APOGEO Tax team.

Author: Sabina Horakova