Donating to Non-Profit
& Third Sector Entities:
a heartfelt gesture that
makes good financial sense too
Supporting a Third Sector Entity (ETS) means making a concrete contribution to social, cultural, or environmental projects of vital importance. But did you know that Italian law rewards citizens’ generosity with significant tax benefits?
When you make a donation (voluntary contribution) to an ETS registered in RUNTS (National Single Register of the Third Sector), you can benefit from a discount on your personal income tax. When filing your tax return (Form 730 or Redditi PF), current regulations allow you to choose between two different tax options, depending on which is most advantageous for your financial situation.
The Two Tax-Saving Options for Individuals
In order for monetary or in-kind donations to qualify for the tax benefits provided by law — either as a deduction from taxable income or a tax credit — they must satisfy a few essential requirements:
Tax Credit
(Direct IRPEF Reduction)
The tax credit directly reduces the personal income tax (IRPEF) owed on your tax return.
How it works: You can deduct 30% of the donated amount from your tax liability.
Higher rate for Voluntary Organizations (ODV): If you donate to a Voluntary Organization (ODV), the deduction rate increases to 35%.
Maximum limit: The deduction calculation applies to a maximum donation amount of €30,000 per tax year.
Exemple: If you donate € 500 to a general ETS, you directly recover € 150 on your taxes. If you donate to an ODV, you recover € 175.
Deduction from Taxable Income
(Reduction of the Tax Base)
The deduction lowers your overall income used to calculate your IRPEF tax brackets. It is particularly advantageous for medium-to-high income earners who fall into IRPEF tax brackets above 30–35%.
How it works: You can deduct the donated amount up to a limit of 10% of your total declared income.
Flexibility for subsequent years: If the deduction exceeds your total income, the excess is not lost:
it can be carried forward to increase
the deductible amount in subsequent tax periods, up to the fourth year.
Key Rules for Claiming Tax Benefits
To ensure that your donation is recognized by the Italian Revenue Agency (Agenzia delle Entrate), you must meet three simple requirements:
Traceable Payment Method
The donation must be made exclusively through traceable payment methods (bank or postal transfer, credit/debit card, check, or digital payment platforms). Cash donations do not qualify for any tax benefits.
Retention of donation receipts
You must keep your bank or postal statement or payment receipt, together with the confirmation statement provided by the beneficiary entity.
Entity Status & Qualification
The entity must be officially registered in the National Single Register of the Third Sector (RUNTS) or fall under the transitional tax regime provided for by law.
Summary of key benefits
| Type of Benefit | Donor Benefit | Maximum Limit | Who Benefits Most |
|---|---|---|---|
| IRPEF Tax Credit (ETS) | 30% of the donated amount | Up to a maximum of €30,000 per year | For individuals with incomes up to €28,000 or those seeking a straightforward calculation |
| IRPEF Tax Credit (ODV) | 35% of the donated amount | Up to a maximum of €30,000 per year | For donors contributing to Volunteer Organizations |
| Deduction from Income | Reduction of taxable income | Up to 10% of total income | For individuals with high marginal IRPEF tax rates (e.g., 35% or 43%) |