Flood aid: overview of available tax relief

Income tax

You may apply for:

• Tax payment deferment: if you fall behind on the payment of your tax due to the floods, you can apply for a deferment of the tax payment or for an instalment plan (spreading the tax into instalments). You can also apply retrospectively. The Financial Administration’s web application can help you with this.
• Adjustment of tax prepayments: tax prepayments can be adjusted or waived in full upon request. Here too, the online form can be used.
• Waiver of interest and penalties: if you are late filing your tax return or paying your taxes, you can apply for a waiver of default interest, interest on the deferred tax amount, or penalties for the late filing of a tax return.
   

Relief for donors and donation recipients:

• Tax base reduction: up to 30% of donations made for charitable, health, environmental or humanitarian causes can be deducted from the tax base (the chamber of deputies is discussing an amendment that will increase this limit for 2024, 2025, and 2026).
• Tax exemption: monetary and in-kind donations received in connection with the floods are exempt from income tax. This applies to donations from public fundraisers as well as from individuals and companies.
   

Special regime for entrepreneurs

• Costs incurred as part of aid provided in kind (e.g., supply of building materials in connection with recovery after natural disasters) are considered deductible for income tax purposes.
• These costs cannot be simultaneously claimed as a reduction of the tax base on the basis of the provided donation. 
   

VAT

You may apply for:

• As in the case of income tax, it is possible to apply for a deferment of the tax payment or spreading the tax into instalments, and for a waiver of interest and penalties for late payment of the tax and late submission of the tax return (also applies to VAT ledger statements). 
   

VAT treatment of donations

• Monetary donations made by a VAT payer, whether in cash or non-cash, are not subject to VAT and shall not be reported in the VAT return.
• For in-kind donations, it depends on whether the goods were acquired for economic activity:
  • If not, the VAT payer is not entitled to deduct VAT, the donation is not subject to VAT and shall not be reported in the VAT return.
  • If yes and the VAT payer claimed a VAT deduction, they must pay output tax on the donation.
• If the VAT payer provides services free of charge and claimed a VAT deduction, they must pay VAT on these services.
   

Real estate tax

• By issuing a generally binding decree or a measure of a general nature, municipalities can exempt flood-damaged real property from real estate tax for up to five years. The tax exemption can apply to both land and buildings. It must take effect before 31 March 2025.
   

Social security premiums

• The payers of social security premiums (employers, self-employed persons) from flood-affected areas may apply for a waiver of the penalty for non-payment of premiums due to the harshness of law with the relevant district social security administration. 
• The application must include the grounds in which the applicant sees the harshness of the law, together with a supporting affidavit. Each application will be considered on an individual basis, and there is no legal entitlement to a waiver of the penalty. 

For more information, please visit the website of the Financial Administration and the Social Security Administration or contact us.