Must recipients pay tax on charitable donations?
Donations you receive directly in connection with the floods are exempt from income tax, regardless of the donor. The donor may be someone you know, your employer or a charity. These cash or non-cash donations have been provided for a humanitarian purpose.
However, it is important that you can, if necessary, prove during a tax office inspection that you actually used the money or material assistance to repair the damage caused by the floods. The exception is donations received from a public collection. You do not have to prove how those donations were used. 🙂
Does the recipient have to file a tax return?
Recipients do not have to include tax-exempt income in their tax return.
However, be careful if you receive a donation worth more than 5 million Kč. In that case, you must notify the tax office of your tax-exempt income using a simple form.
If you are unsure which income received free of charge you must report to the tax office, get in touch and we will look at it together :-).