Making donations to businesses tax deductible is win-win during crisis: Notary
Private lenders should be more easily allowed to make charitable donations to ailing small- and medium-sized businesses in the Netherlands in an effort to support those affected by Covid-19 , Rotterdam-based notary Aniel Autar believes.
His proposal, which has garnered interest from both the private and the public sector, is designed to encourage charitable donations and interest-free loans to support self-employed workers and businesses impacted by the fallout of the crisis.
According to Autar, this would be achieved by cutting gift taxes on donations to companies unable to pay their debts, and on interest-free and on-demand loans. Autar also believes that donations to hard-hit businesses should entitle them to an income or corporate tax deduction, and that company-to-company loans should be considered to be business loans which can be written off at a later stage.
"I have received many reactions to my proposals. Not only from entrepreneurs, but also from their advisors, business organisations and a number of politicians. All were positive and saw the added value of the proposal," Autar explained to NL Times.
"I therefore assume that my proposals will be taken up by politicians and translated into policy," he added.
In 2013, Autar successfully pleaded to allow parents to donate up to 100,000 euros tax-free to their children to purchase their own homes in the future. His effort drew considerable attention at the time.
"Partly because of this, the number of real estate transactions increased considerably and carpenters, plumbers, mortgage advisers et cetera got work again. It is said that between 6 and 8 billion euros were donated tax-free," said Autar.
The recent proposal to aid businesses is the latest in Autar's longstanding advocacy of charitable donation as a method to support those in need. Believing that taxes on donations are the biggest force holding back such support, Autar points out that more should be done to allow people and businesses to give at their own liberty.
"The culture in the Netherlands is that people like to help each other; also in a financial sense! The willingness to help each other increases when there is no taxation. Taxation is often seen as the most important obstacle to giving. The money must therefore end up with the people/parties for whom it is intended," said Autar.