Corporate cultural sponsorship

This page was last modified on 12-05-2017

Corporate cultural sponsorship emphasizes the general interest role of businesses in addition to their economic role. It is defined as a financial, human or material support provided without compensation by a business to any activity in the creative arts and culture sector.

In Luxembourg, donations from public and private sources are collected and managed by the National Culture Fund (Fonds Culturel National - FOCUNA) which acts as an intermediary between the cultural world and the corporate world by accompanying both artists and entrepreneurs in their willingness to enhance their contribution to the community.

Businesses can participate in different cultural projects through:

  • financial sponsorship (cash donations);
  • sponsorship in kind or product donations (donations in kind);
  • technological sponsorship;
  • skills sponsorship;
  • sponsorship of grants.

In order to promote sponsorships, the law provides for tax reductions for financial sponsorships or donations to the culture sector in Luxembourg.

Who is concerned

Each business can become a patron of the arts, i.e. support and contribute to the financing of activities in the creative sector in order to:

Each cultural institution declared of public interest is allowed to receive donations in kind or in cash via the National Culture Fund. Some examples are:

  • the Institut grand-ducal;
  • the Centre universitaire de Luxembourg;
  • the Archives nationales de Luxembourg;
  • the State and public museums;
  • the national and public libraries;
  • the National Sites and Monuments Service, etc.

Each cultural institution declared of public interest may request that its activities are accredited by the National Culture Fund;.

How to proceed

Sponsorship types

A business that intends to become a patron can chose between:

  • financial sponsorships, i.e. give money to a project of general interest;
  • sponsorships in kind or product donations, i.e. the donation of merchandise in stock or fixed assets (e.g.: furniture, art objects, etc.);
  • technological sponsorships, a specific form of sponsorship in kind which consists in offering the technology available or used by the business to a project of general interest (e.g.: machinery, software, etc.);
  • skills sponsorships, i.e. assigning an employee during his working hours to a project of general interest.

Financial sponsorship

Beneficiaries

The company can make a financial donation to the National Culture Fund :

  • either without specifying the final beneficiary;
  • or by appointing as a beneficiary:
Financial donations to these institutions are tax deductible provided that the business has made an annual donation of at least EUR 120. 

Purpose of donations

These cash donations whose amount cannot be lower than EUR 50 are used to finance cultural events that:

  • present a significant interest for the creative arts and culture sector, namely music, theater, cinema, dance, literature, visual arts or conservation and the promotion of the national historic and cultural heritage;
  • are aimed at a larger public;
  • do not have a commercial or industrial purpose.

Procedure

Each business that wishes to make a cash donation to the National Culture Fund (or to any other institution declared of public interest via the National Culture Fund) has to first complete the application for admissibility of a donation (demande de recevabilité d'un don).

On receipt of the application, the steering committee of the National Culture Fund will decide on the admissibility of the donation in accordance with the abovementioned criteria and on its value. The Fund will forward its reasoned decision to the applicant within 3 months following the application.

Subject to approval of the application, the sponsor can send the donation via bank transfer to the National Culture Fund who will ensure the funds are transferred to the final beneficiary.

The business must have made an annual donation of EUR 120 at least in order to benefit from a tax deduction. The Fund will issue a certificate of donation that will enable the sponsor to benefit from a tax deduction.

Application for accreditation

Each association or cultural institution may request that its activities are accredited by the the National Culture Fund.

Donors who wish to support an accredited activity are exempt from having to complete the application for admissibility of a donation.

The application for accreditation, duly motivated and documented, is assessed by the steering committee of the National Culture Fund who will forward its decision within 3 months following the application.

The accreditation is granted for a period of 24 months and the application for renewal must be submitted 3 months prior to the expiry date of the accreditation at the latest.

Example: the National Library may request that its activities are accredited by the National Culture Fund. Each natural or legal person who wishes to make a donation to the National Library is exempt from having to complete a prior application for admissibility of the donation. 

Donations in kind

Eligible donations

The business can make the following donations in kind:

  • art objects;
  • furniture;
  • books;
  • collector's items;
  • documents of high cultural, artistic or historic value.

Beneficiaries

The business can make the following donations in kind to the National Culture Fund:

  • either without specifying a final beneficiary, in which case the Fund will use the donation to finance various cultural projects under its management;
  • or by appointing as a beneficiary:

Admissibility of the donation

Donations are subject to approval by an interministerial commission and, depending on the case, by an expert who will decide on the cultural, artistic or historic interest of the donation, as well as on the value of the donated items. The commission will decide on the tax deductibility of the donations.

Grants

Businesses can sponsor and contribute to the financing of grants offered by the National Culture Fund in order to promote research and provide artists with the necessary ressources to carry different activities which are in relation to their artistic approach.

The sponsorship of grants:

  • transmits a positive and committed image of the business to both the public and the employees;
  • is an excellent motivation and identification tool for employees in a business as the sponsorship develops their pride in belonging to a noble cause;
  • unites the employees in a collective positive force as, for instance, within the selection process of one or more beneficiaries of a grant, an employee can be a member of the jury and embody the cultural commitment of the business.

Tax deduction

Conditions

As a general rule, only cash donations are tax deductible.

However, donations in kind (merchandise or fixed assets) may exceptionally benefit from a tax deduction following the approval by an interministerial commission and, where necessary, by an expert.

In order to be tax deductible, donations have to be made to a cultural institution declared of public interest by law, such as:

  • the National Culture Fund;
  • the Institut grand-ducal;
  • the Centre universitaire de Luxembourg;
  • the Archives nationales de Luxembourg;
  • the State and public museums;
  • the national and public libraries;
  • the National Sites and Monuments Service;
  • or any other cultural institution declared of public interest.

Procedure

Donations must be indicated in the section "dépenses spéciales" in the tax return under certain conditions:

  • the amount of annual donations by the business must be at least EUR 120;
  • the annual deductible amount cannot exceed 20 % of the total net income and the total amount of EUR 1,000,000;
  • where this limit is exceeded, the balance can be carried forward to the following 2 tax years;
  • non-resident taxpayers who are treated as resident taxpayers can request the deduction of their donations within the framework of their annual tax assessment;
  • donations in excess of EUR 30,000 transferred by a banking institution which is not authorised to operate in the European Union must be approved by a ministerial order issued by the Ministry of Justice. The application for approval must be submitted to the Ministry of Justice by the beneficiary of the donation.

Who to contact

4, boulevard Roosevelt
L-2912 - Luxembourg
Luxembourg
Phone: (+352) 247 86 617
Fax: (+352) 29 55 51
Email info@focuna.lu