16 May 2024

Philea speaks at EESC expert hearing “How can taxation systems better support the social economy?”

Taxation policy is a key element in promoting a vibrant, robust philanthropy and wider social economy in Europe. Well-placed tax incentives can encourage philanthropy and the creation of new social economy entities including foundations and bolster up existing ones. Hanna Surmatz, Philea’s Head of Policy, called for an enabling tax policy for philanthropy and public benefit foundations also in across-borders contexts at the recent EESC hearing “How can taxation systems better support the social economy?” held on 7 May 2024.

In line with the Social Economy Council Recommendations of November 2023 and the Philea Manifesto, individual and corporate donors should get tax incentives when donating to social economy/public benefit organisations. Secondly, public-benefit foundations should be exempt from corporate income tax (including income from their cross-border EU investments). A more enabling VAT system should also be considered.

Words should now be followed by action: The November 2023 Council Recommendation calls on Member States to facilitate compliance on a practical level for public-benefit cross-border donations for taxation purposes, for instance by issuing a standardised form of the recipient entity established in another Member State on the amount of the donation, identifying both the recipient and the donor. Such soft law approaches should be swiftly adopted and the EU should play a role to assist and facilitate the development of such multilingual templates. Simplification should also be foreseen for cases where endowed public-benefit foundations’ asset allocation includes investments into other EU countries. Philea clearly welcomes the current EU call to action for the Member State level and invites the EU to go beyond that, and to develop an EU Directive on mutual recognition of tax-exempt public benefit organisations and their donors. Philanthropy and foundations could unleash much more potential if a Single Market for philanthropy and the wider social economy ecosystem existed.  

We hope that the EESC hearing and opinion drafted by Giuseppe Guerini will contribute to developing policy frameworks for a stronger social economy including philanthropy in Europe.

View the recording of the hearing.

Read more information on the EESC opinion.


Hanna Surmatz
Head of Policy