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Stimulus for Businesses to Donate to Charity

Published: August 26, 2013 | 12:04 pm
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tax-code

What changes have been made to the Tax Code regarding charitable donations, and how will they stimulate the business sector to rectify the flaws in this area? According to the changes to the 8th article of the code, the term ‘charitable donation’ has been clearly defined. The Civil Society Institute, which had initiated the legislative changes, has stated that the reforms aim to rectify the flaws in the system of regulating the non-manufacturing legal entities and charity organisations. The institute’s expert on legal matters Irakli Mkheidze has told TV3 that up until now it was impossible to determine whether or not property obtained by an organisation gratuitously was to count as a charitable donation, and be subject to income tax deduction. According to him, the changes will stimulate businesses to make more charitable contributions, while the charities will benefit from an increase in both financial donations and free services.
According to the changes to the Tax Code, businesses and individuals will be able to deduct funds used for charitable donations and providing free services from their declared income. The legislative changes came into effect at the beginning of August.

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