Tonika Hirdman, the foundation’s executive director, in a statement said she is delighted with this recognition as a public utility foundation (FRUP). For her, “the renewal of its tax approval is a symbol of the confidence granted to it by the French tax authorities and confirms the interest for philanthropists living in France to engage in philanthropy from the grand duchy.”
The decision of the French authorities is based on Article 795-0 A of the General Tax Code, which provides that tax exemptions for French foundations are applicable to similar organisations located in a member state of the European Union when these organisations have received tax approval in France.
This recognition is not just symbolic. “France is one of the few countries in the world that grants a tax credit on donations made to foundations,” said Hirdman. The tax credit is 60% for a donation of up to €2m and 40% above that. In addition to this credit, a deduction of 66% on income up to €1m and 20% above that can be made.
€25m since 2008
But the most important aspect concerns legacies. If a foundation receiving a bequest is not declared to be of public utility, inheritance tax is 60%. “With this tax approval, we pay nothing.”
Since its creation in 2008, the Fondation de Luxembourg has received €25m in donations from France, including €6m in legacies.
The approval it has received will be valid for the next three years.
This story was first published in French on Paperjam. It has been translated and edited for Delano.