Tax Deduction Calculator for Liberal Allowances and Businesses (Article 100 TUIR)
Calculate the deductible amount of corporate donations to ETS/RTS: up to 10% of declared income, excess reportable for 4 years, estimated IRES savings.
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Frequently Asked Questions
What is the deductibility of liberal allowances for businesses?
Taxable liberal grants made by companies to ETS registered with RUNTS and other non-profit entities are deductible from business income at a rate of 10% of declared income (Article 100, Section 2, DPR 917/1986 TUIR). Any excess can be carried forward for the next four consecutive years.
What entities are eligible for tax deduction under Article 100 of the TUIR?
Concise third sector entities (ETS) registered with the RUNTS under the terms of DLgs.117/2017 (Third Sector Code), temporary ONLUS, foundations and social interest associations, and university institutions. Registration with the RUNTS is an essential requirement for full application of article 83 CTS.
What does "cash principle" mean in liberal allocations?
The principle of cash means that deductibility applies to the payment made (cash out) in the year the expenditure is actually paid, regardless of the accounting period. A donation committed in December but paid in January is deductible in the year of actual payment.
How does the excess report work in the next 4 exercises?
If the donated amount exceeds 10% of declared income, excess is not lost. Can be deducted in the next four fiscal years, always within 10% of each year's income. The report is cumulative: any new excesses are added to previous ones.
Is estimated tax savings definitive?
No. Estimated tax savings use the standard IRES rate of 24%. The actual rate depends on the business type (SPA, SRL, cooperative, sole proprietorship in IRPEF), potential application of IRAP, and other specific fiscal variables. Consult a tax advisor for an accurate estimate.
How is it used?
- Insert payment amount
Indicate the total of liberal allocations made during the exercise in favor of ETS/ONLUS members registered with RUNTS or other entities provided for by Article 100 TUIR.
- Insert declared income
Indicate the taxable income of declared business in the year. The deductible limit is equal to 10% of this amount (Article 100, Section 2 TUIR).
- Calculate Deductibility
Click "Calculate" to get the deductible amount for the year, excess carryable over the next four periods and estimated tax savings.
- Verify with your accountant
The result is advisory. Consult a professional to verify the beneficiary's qualification, applicable cash principle, and specific conditions of your business.
What is the deductibility of corporate liberal allowances and how does it work?
Deductions for liberal grants made by businesses to Third Sector Organizations (TSOs) registered with RUNTS and other non-profit organizations are deductible from business income under Article 100, Section 2 of DPR 917/1986 (TUIR). The general limit of deductibility is 10% of taxable income declared in the year.
Unlike physical persons who benefit from IRPEF deductions (19% or 30%), businesses enjoy an actual tax deduction from their income: the deductible amount directly reduces the professional's IRES or IRPEF base, resulting in a proportional tax savings. For example, for a SRL subject to IRES of 24%, €10,000 deductible amounts to €2,400 effective savings.
The D.Lgs. 117/2017 (Third Sector Code, art.83) strengthened and expanded the benefits for donations to ETS registered with the National Unique Register of the Third Sector (RUNTS). Registration with RUNTS is essential: donating to an unregistered association may not qualify for full deductibility as prescribed by law.
Key feature of Article 100 TUIR for businesses is the excess return mechanism: if donations exceed 10% of revenue in the current year, the excess is not lost but can be deducted over the next four years, always within the annual limit, allowing for large donations to be planned and spread out over time.
Practical example
- A sole proprietorship has declared business income of €200,000 and decides to donate €25,000 to an ETS foundation registered with the RUNTS.
- Deducible Limit: 10% x 200,000 € = 20,000 €.
- Deductible amount for the year: 20,000 € (covers the full annual limit).
- Excess recoverable in next 4 years: €5,000.
- Savings IRES for the year (24% rate): 20,000 € x 24% = 4,800 €.
Vocabulary Dictionary
- Taxable Allowance
- Donation made voluntarily by a company in favor of a beneficiary organization without compensation. It is not deductible as a normal expense but follows the rules specified in Article 100 TUIR.
- Third Sector Entity
- Category of non-profit entities regulated by D.Lgs. 117/2017 (Third Sector Code). Includes ODV, APS, third sector foundations, social cooperatives and other entities. Registration with RUNTS is the requirement to access the benefits under Article 83 CTS.
- National Register of Third Sector Organizations
- Registered by the Third Sector Code at the Ministry of Labour. An entity must be registered with RUNTS to qualify as an ETS. Verifiable online on the RUNTS portal (runts.labor.gov.it).
- Cash Principle
- Rule for which the deductibility of free payment allowance is due to the actual payment (cash out), not in the year of decision or commitment. A payment made on January 2nd is deductible in the following year of the decision.
- Excess return
- Mechanism that allows deduction of the excess expenditure exceeding 10% of current year's income for the next four exercises. The report is cumulative and follows the FIFO principle: deductions are made first from previous years' excesses, then from this year's excess.
- Income Tax on Companies
- Set up income tax for legal persons (SPAs, SRLs, cooperatives etc.) with standard rate of 24%. Deductible amount reduces taxable income IRES, resulting in savings equal to deductible amount x 24%.
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