The Platform for Patronage has celebrated the approval this Wednesday in the Congress of Deputies of the new Patronage Law. Led by the Fundació Catalunya Cultura, the 180 cultural, social, and research entities that make up the initiative have expressed satisfaction with the text: "It recognizes solidarity and private participation in the public interest."
The law is a PDeCAT initiative led by deputy Sergi Miquel that modernizes and replaces the previous legislation on this matter, with new tax incentives for patronage (increases in the personal income tax deduction for individuals and legal entities) and the inclusion of new concepts (donations of services and reward patronage), among other novelties.
The patronage bill was approved in committee in the Congress of Deputies this Wednesday, after PSOE, PODEM, and PDeCAT announced a total agreement on its terms last week, including a deduction of up to 50% for so-called sustained patronage, reports ACN. After its approval in committee, its transfer and vote in the Senate are expected. Its entry into force will take place on January 1, 2024.
The norm increases the deduction percentages for patronage. In the case of individuals, it raises the base on which 80% of the donation can be deducted in personal income tax from 150 euros to 250 euros, and the rest will have a 40% deduction (instead of 35%). In the case of legal entities, corporate tax deductions also increase from 35% to 40%. In the case of sustained patronage, the deduction increases to 45% for individuals and 50% for legal entities (until now it was 40%) provided that the same donation has been made in the two previous years.
For Maite Esteve, director of the Fundació Catalunya Cultura, "today a first step is taken towards legislation more adapted to the 21st century, more European and just, which recognizes solidarity and private participation in the public interest. There is still a long way to go, but we celebrate the progress and congratulate and thank so many entities and anonymous people who, from many Platforms, have united their voice and strength to achieve this reform that for years has been impossible to agree upon."
The current legal framework in Spain for patronage is Law 49/2002, of December 23, which, in turn, updated Law 30/1994, on Foundations and Tax Incentives for Private Participation in Activities of General Interest, the first to incorporate the term "patronage." According to PDeCAT, the text "improves tax deductions and updates different concepts to equate the current law with the best European legislations on the matter, such as the French and Italian ones."
The new regulation stimulates micropatronage and, apart from increasing deduction percentages, updates the concept of donations and gifts, incorporating donations of services (advice and consulting, advertising spaces in media, donations for the architectural rehabilitation of assets of cultural interest and donations of protected natural spaces or cultural assets by recognized authors, and all types of assignments of use of real estate). In this way, it is equated with other European legislations in which patronage is defined beyond a simple economic transaction.
The text that the Senate must now process also includes the so-called recognition or reward patronage, which allows the donor to obtain symbolic returns in the form of consideration for goods or services, provided that they do not represent more than 15% of the value of the donation with a maximum cap of 25,000 euros.
Finally, the modalities of exempt economic exploitations are expanded, when carried out by non-profit entities, in the following activities: development and innovation, provision of socio-labor insertion services for people at risk of social exclusion, and teaching and vocational training linked to high-capacity students. Likewise, the automatism for applying exemptions from local taxes to the assets of non-profit entities is reinforced.
According to the Fundació Catalunya Cultura, this regulatory reform "is an important step in recognizing the essential work that non-profit entities (NPEs) carry out in Spain to fulfill general interest purposes." "When we talk about philanthropy and patronage, we talk about disease research, investment in education and culture, environmental projects, inclusion of people with disabilities, and many other activities that improve citizens' lives. NPEs carry out a fundamental and necessary social activity because they contribute to covering essential needs not met by either the private or public sector. They are the expression of philanthropic action, commitment, altruism, and individual and social sensitivity," highlights the foundation chaired by Eloi Planes.
The entity emphasizes that the expenditure of NPEs on general interest activities alone reaches almost 17 billion euros, and in the case of foundations, in the last 12 years, the number of final and direct beneficiaries of their general interest activities has multiplied by 2.45. It is estimated that the total foundational sector in Spain generated more than 27 billion euros in added value in 2020 (2.4% of GDP), and more than 550,000 jobs, 3.4% of the total full-time jobs in the Spanish economy. In 2022, 39% of the population over 18 years old collaborated with an entity.
"It is worth noting that the achievement of a new legal and fiscal framework for patronage in the State that favors citizen and business commitment to culture through philanthropy and patronage has been one of the Foundation's main lines of action since its creation," concludes the entity directed by Maite Esteve. The Fundació Catalunya Cultura leads the Platform for Patronage, which encompasses 186 entities from the cultural, social, and research fields, who have joined the demand for the reform of the Law, and who share the same vision on the promotion of patronage.