Claire Saint-Léger - claire.saint-leger psemail.eu
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Tax Deductions in the USA
The American Foundation for the PSE is a 501 (c)3 organization dedicated to the advancement of economic understanding in France and elsewhere. For all types of sponsorship, contributions to the AFPSE – American Foundation for the Paris School of Economics are deductible from taxable income for all individuals and corporations which pay tax in the United States. AFPSE can also receive grants from other public and private foundations.
Tax Deductions in France
The Paris School of Economics is a Scientific Research Foundation. Following article L344-11 of the French “code de la recherche", the School is governed by the same rules as those applied to Public Utility Foundations with respect to sponsorship.
If you are domiciled for tax purposes in the USA, the AFPSE can help you to make a donation to the PSE and benefit from the associated tax advantages in the USA.
If you are domiciled for tax purposes in France, there are a number of different ways of supporting the Paris School of Economics, and for each of them you can claim back 60% of your sponsorship against company or income tax, up to a maximum of 0.5% of turnover. There is the possibility of deferring this figure over the five following tax years if the sponsorship amount exceeds 0.5% of turnover, or if your company is making a loss
A gift of 300 000€ will only cost 120 000€.
A commitment of 1 Million € over 5 years will only cost 400 000€ in total.
- If you would like to support the Paris School of Economics, make a donation and benefit from a tax reduction of 66%, applicable to the total sum of your gift, up to a maximum of 20% of your taxable income.
Example: A gift of 100 000€ only costs 34 000€.
- If you would like to support the Paris School of Economics by transferring a revenue or payment which is due to you, such as royalties, rents, investment returns, or the income from a sale of an asset, you can carry out an “abandon de revenus ou de produits” and benefit from a tax reduction.
- If you wish to make a bequest, this will be exempt from any tax on the transfer.
- If you wish to include PSE in your will, this will be exempt from inheritance tax.
- You can also designate the Paris School of Economics as part or whole beneficiary of a life insurance policy. This will be exempt from both inheritance tax and the standard 20% charge normally levied on life insurance policies in the case of death.
Do you pay the Wealth Tax (ISF)?
If so, you can benefit from a tax reduction equal to 75% of the amount of your gift (i.e “Don-ISF”) to the Paris School of Economics. This tax reduction has a ceiling of 50 000€ by taxpayer per tax year (or 45 000€ if you invest the same year in a small firm through a tax reduction mechanism).
Example: You make a gift of 66 666€ in year N and your ISF tax bill in year N+1 is 50 000€ before any tax reductions. The base on which your ISF tax reduction is assessed is 66 666€. Your ISF tax reduction is 66 666€ x 75% = 50 000€.
You will therefore not pay any ISF in year N+1.
NB: If the associated ISF tax reduction exceeds 50 000€, the unused part of the tax reduction is not refunded, nor can it be deferred to future tax years.