Donations, including religious-based donations and grants, are exempt from taxation provided there is no business or ownership relationship between parties. However, there is a 5% limitation on donations based on a company’s net income. The following types of income are tax-exempt:
- (a) income that a nonprofit organization puts towards providing scholarship funds
- (b) income that a nonprofit organization reinvests in the area of education, or research and development, according to the timing requirements of the income tax law (Law No.36 of 2008 on Income Tax Article 4 Section 3).
Photo credit: Patrick M. Loeff