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ArticlesJanuary 31, 20240

 Sponsorship agreement and tax incentives offered to sponsors

Sponsorship contracts are governed by Law no. 32/1994 on sponsorship, which defines this activity as “the activity carried out based on a contract concluded between the sponsor and the beneficiary, agreeing on the financial means and material goods provided as support, as well as the duration of the sponsorship.”

Who can be a sponsor?

The law indicates: Any individual or legal entity from Romania or abroad who carries out sponsorship under the conditions of the law is considered a sponsor.
Of particular interest is the situation of legal entities. This includes commercial companies, sole proprietors, family enterprises, or any other similar entities wishing to support an organization.

Who is the beneficiary?

“Art. 4. Any legal entity of public utility, headquartered in Romania, engaged in or intending to engage in an activity with a direct humanitarian, philanthropic, cultural, artistic, educational, scientific, religious, sports, or human rights and civic education character or environmental quality.”
Thus, sponsorship can be granted to:

  • Any nonprofit legal entity headquartered in Romania that engages in or intends to engage in an activity that can be sponsored according to Art. 4 of the Law;
  • Any individual residing in Romania or belonging to the Romanian spirituality, whose consistent activity in one of the fields provided for in Art. 4 of the Law is recognized by a nonprofit legal entity, legally established in the country or abroad, with sustained activity in the field for which the recommendation is given.
What should a sponsorship contract contain to be validly concluded?

• Identity of the parties;
• Object of the sponsorship;
• Financial support amount;
• Contract duration;
• Rights and obligations of the parties.

Sponsors can benefit from certain tax incentives, in accordance with the provisions of Sponsorship Law no. 32/1994 and the Tax Code. These incentives vary depending on the type of sponsorship provided and the category of the entity receiving the sponsorship.
Romanian individuals or legal entities making sponsorships in the specified fields can benefit from a reduction of the taxable base by the equivalent of the sponsorship, but not exceeding 5% of the taxable income, except for income from salaries in the case of individuals.
In addition, foreign individuals or legal entities owing tax to the Romanian state, under the current legislation, for income earned in Romania but making sponsorships in the mentioned fields, can benefit from a reduction of the taxable income by the equivalent in Romanian lei of the sponsorship, calculated at the exchange rate of the day on the date of payment, but not exceeding 5% of the taxable income.

If the incentives are not granted, a complaint can be filed regarding this matter with the general directorates of public finance and financial control. Appeals must be submitted within 30 days from the date of communication, by the specialized body of the Ministry of Finance, of the decision on the request for granting incentives. However, filing an appeal does not suspend the sponsor’s obligation to transfer the amounts owed as tax or customs duties to the state budget or, as the case may be, to local budgets.

If the situation is not resolved administratively, the aggrieved party can address the court within 15 days from the communication of the reasoned decision regarding the submitted complaint.

For further information or any additional inquiries, please do not hesitate to contact us:

➡ Phone: (+4) 031 426 0745
📧 Email: office@grecupartners.ro

We are here to assist and provide legal support for all your needs. We look forward to discussing with you.

Denisa Croitoru

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