How to Deduct Donations from Taxes

Donations are a great way to do good while saving on taxes. However, certain conditions must be met for donations to be tax-deductible. In this Smart eTax blog post, we provide an overview of the key requirements and rules you should consider when claiming your donations on your taxes. We cover federal regulations and those for individual cantons, helping you ensure that your good deeds are financially rewarded.

What Are Voluntary Contributions?

Voluntary contributions are financial donations or asset gifts made without compensation to organizations or institutions. These donations can be directed to various types of recipients, including government entities such as the federal government, cantons, and municipalities, as well as other legal entities in Switzerland that are exempt from taxation due to their public or charitable purposes.

Can I Deduct Donations Without a Receipt?

It is possible to declare "house and door donations" under deductions for donations and charitable contributions on your tax return, even without receipts. However, this is not recommended and may only succeed in some cases. It is crucial to check your tax assessment to confirm if this deduction was accepted.

Depending on the canton, proof of donations may not be required but can be requested by the tax authorities at any time.

Smart eTax Tip

Collect your donation receipts throughout the year with Smart eTax, ensuring no receipt is lost. This simplifies your tax return and ensures you claim all possible deductions.

How Much Can I Deduct for Donations?

Summary of Cantonal Regulations:

Most Swiss cantons allow deductions of up to 20% of net income for individuals or 20% of net profit for legal entities. Here's a summary of some specific regulations:

• Aargau, Appenzell Innerrhoden, Appenzell Ausserrhoden, Bern, Basel-Stadt, Fribourg, Geneva, Glarus, Graubünden, Lucerne, Nidwalden, Obwalden, St. Gallen, Schaffhausen, Solothurn, Schwyz, Ticino, Uri, Vaud, Valais, Zug, Zurich: Deductions of up to 20% of net income or net profit, provided total donations are at least CHF 100.

• Basel-Landschaft: Unlimited deduction.

• Jura: Deductions of up to 10% of net income or net profit.

• Neuchâtel: Individuals can deduct up to 5% of net income; legal entities can deduct up to 10% of net profit.

• Thurgau: Up to CHF 8,000 can be deducted for net incomes below CHF 40,000; for higher incomes, up to 20% can be deducted if the total donations amount to at least CHF 200.

• Liechtenstein: Voluntary cash donations to charitable, tax-exempt legal entities and special asset dedications located in Liechtenstein, Switzerland, or an EEA state can be deducted up to 10% of taxable earnings.

Make sure to keep all donation receipts to fully benefit from the tax deductions.

Which Charitable Organizations Are Tax-Deductible?

To qualify for a donation deduction, ensure the organization you donate to is recognized as charitable or public. One reliable way to check is by looking for the Zewo seal of approval. Zewo is a foundation that certifies trustworthy organizations in Switzerland. Donations to Zewo-certified organizations are always tax-deductible. You can find certified organizations on the Zewo website.

Additional Ways to Verify

Not all charitable organizations are listed by Zewo. However, there are other ways to ensure your donation is tax-deductible:

Cantonal tax authority lists: Some cantons maintain lists of organizations with exclusively charitable purposes based in their canton. These lists are often recognized by other cantons as well.

• Voluntary Contributions Graubünden
• Voluntary Contributions Zurich
• Voluntary Contributions Thurgau
• Voluntary Contributions Basel-Land
• Voluntary Contributions Aargau
• Voluntary Contributions Basel-Stadt

Tax Exemption of the Organization: Organizations exempt from taxation can also be eligible for donation deductions, even if they do not have the Zewo seal. Ensure the organization serves charitable or public purposes.

Which Charitable Organizations Are Not Tax-Deductible?

Some tax-exempt organizations are not eligible for donation deductions, particularly those with a purely religious purpose. Donations to such organizations are only tax-deductible if the organization pursues charitable or public purposes alongside its religious mission and your donation is used for that purpose.

Summary:

• Check if the organization has the Zewo seal.
• Use the lists from cantonal tax authorities.
• Ensure the organization is tax-exempt and serves charitable or public purposes.
• Donations to organizations with purely religious purposes are not deductible unless they also pursue charitable purposes.

Conclusion

Donations are an excellent way to do good and save on taxes. However, some conditions must be met for your donations to be tax-deductible. It is essential that donations go to organizations recognized as charitable or public. The Zewo seal helps identify such organizations, but cantonal lists can also guide you to eligible organizations.

While it may be possible to deduct donations without receipts in some cases, it’s not guaranteed and varies by canton. Always keep donation receipts to ensure your deductions are accepted.

Regarding how much you can deduct, the rules vary by canton. In most cantons, you can deduct up to 20% of your net income or net profit. For specific information, refer to your cantonal tax authorities.

In short: Verify whether the organization is tax-exempt and serves charitable or public purposes, and you’ll be well on your way to enjoying the tax benefits of your generosity.