The new patronage law unsticks its approval and will come into force in January

Actors linked to the field of patronage are in luck. The Council of Ministers has approved, through a royal decree-law, the reform of the regulations, updating the norm available until now, from 2002. The law recovers the text already approved in April in Congress. The parliamentary groups validated the proposal, but the early election was announced just days before the Senate validated the norm. Thus, its processing was paralyzed, until now.

The new norm will come into force on January 1, and will represent a significant advance for patronage and all that it implies. Subsequently, it must pass through Congress. The law is expected to be validated, as it is the same text that was already approved by the Chamber in the last legislature.

The reform of the law, which expands tax deductions for donations, responds to a historical demand from multiple actors linked to patronage. "There is still a way to go, but today is a day of celebration, in which a barrier of legislative immobility that we had been asking to change for 21 years has been broken," highlighted the director of the Fundació Catalunya Cultura, Maite Esteve.

This legislative change "recognizes the need to adapt the law to the 21st century," as it incorporates elements that the norm did not contemplate until now, such as micropatronage, platforms, and technological patronage. For all these areas, the reformed law increases deductions. Specifically, it expands the 80% deduction for individuals from the first 150 euros to 250. From this figure, the percentage goes from 35% to 40% deduction. In the case of legal entities such as companies, deductions in corporate tax also go from 35% to 40%.

The reform, approved by "surprise," also aims to provide stability to this private contribution to initiatives that benefit society. With this objective, it reduces from four to three the years necessary to obtain a greater deduction when making donations to the same entity, with an additional 5% for individuals, and 10% for companies. "It is a very important incentive for companies to participate in entities," Esteve emphasized.

The changes in the norm do not stop here. As of its entry into force, receiving gifts or rewards ---balanced and with a limit--- will not imply that a donation is invalidated as such. Esteve recalls that, until now, an entity could not give a patron any type of gift. Simple tickets to a concert by the entity itself invalidated the donation, as it was considered a consideration. Now these rewards will be admitted, with a limit of 15% of the value of the donation and a maximum of 25,000 euros. In addition, the transfer of the use of movable and immovable property is now considered a physically deductible donation.

The reformed norm also contemplates patronage through services. As Esteve explains, "professionals such as lawyers and managers could provide their services free of charge to entities as collaboration; acting as patrons, not with money, but with services." As of this reform, these collaborations will be contemplated and can also be deducted.

"Positive outlook" on patronage

Thus, the reform of the law represents a great step in a still incomplete path. The Fundació Catalunya Cultura, which advocated for higher deductions, asks for improvements that clarify certain aspects, but above all to work in one direction: to change the "dark outlook" that society has towards patronage.

"We need public policies that explain that we can all do our bit, and that patronage helps all of us, and not just a few." And, as Esteve has remarked, patronage can be directed to any sector that generates a good for society. This includes culture and art, usually associated with patrons, but also social and scientific initiatives. For this reason, Esteve calls for promoting a "positive outlook" towards patronage that contributes to the advancement and progress of society.

The reform of the law extends the 80% deduction for individuals from the first 150 euros to 250

The demand to update the 2002 regulations also came from the business sector. From the employers' association Cecot, its financial and tax advisor Enric Rius agreed in emphasizing that this approval represents an "important step forward to incentivize and empower society." Furthermore, he highlighted that the experience of greater deductions in other countries shows that the return exceeds an eventual fall in state revenue.

The commitment to society by individuals, both natural and legal persons, generates a positive multiplier factor. Rius is also an active member of the Patronage Council of the Fundació Catalunya Cultura, which was born in 2014 precisely with the renewal of the legal and fiscal framework of patronage in its sights. For this reason, the entity leads the Plataforma pel Mecentage, which encompasses more than 180 entities in the cultural, social, and research fields.

The changes in the regulations will have a wide scope, given the number of entities and people who collaborate with them. In fact, 39% of the population over 18 years old collaborated with an entity in 2022, and it is estimated that the foundational sector in Spain generated more than 27,000 million euros of added value in 2020, in addition to 550,000 jobs. A broad impact from a sector that will benefit from this reform of the regulations historically demanded by multiple sectors.