Comparison of Charity Tax Deduction Rates by Country

There are different charity tax deduction rates for countries around the world. A charity tax deduction is typically available to a donor to encourage them to make a gift for charitable purposes. Finding information about charity tax deduction rates for different countries, however, is difficult since there is no central database or one information source that provides the information.

This article will focus in very general terms how charitable contributions are treated around different parts of the world. The thrust of the article however will discuss the tax rates and treatment of charitable contributions in the United States. A more extensive study or comparison of charity tax rates will require a country-by-country search for information and knowledge of search patterns in order to find the information efficiently and effectively.

United States Charity Tax Deduction

In the United States, a charitable tax deduction is permitted for donors making a charitable gift to a qualified charity. Organizations permitted to accept charitable donations for the purpose of providing a charity tax deduction are found in the IRS Publication 78, Cumulative List of Charitable Organizations.

IRS Publication 78 Organizations

When a charitable contribution is made to an organization that is listed in Publication 78, a charitable tax deduction may be taken of up to either 30 percent or 50 percent of the donor’s adjusted gross income (AGI). This deduction is based on whether or not the organization is identified as a 30 percent charity or a 50 percent charity. When the amount of deduction is determined, the donor files the Form 1040 or 1040A and provides information concerning the amount of the charitable contribution made. The appropriate deduction rate is applied and if the total amount of deductions taken by the donor has been reached, the donor is permitted to carry forward the unused portion of the deduction.

Searching for Country Charity Tax Rates


Performing a Google search or other type of search engine provides very general information about charity tax deductions in other countries but no information on the rate of deductions. For example, Australia has no centralized system for the recognition of charitable organizations, such as the United States. Hong Kong’s Inland Revenue Department provides a process for charitable organizations to be recognized. Contributions made by donors in Hong Kong can be deducted equal to the amount donated. The amount of the deduction cannot exceed 25 percent of their total income.

Other Countries

The United Kingdom (U.K.), consisting of Wales, Scotland and England, provides a deduction for donors, after deduction of income taxes. Finding specific rates on a country-by-country basis is difficult in that it is not necessarily an apples-to-apples comparison. The system for charity tax deductions in the United States is not well duplicated in other countries.

 

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