The CSR relief is designed to encourage businesses to integrate corporate social responsibility (CSR) into their operations. One way to implement CSR principles is by providing financial support to organisations engaging in socially beneficial activities.

The sponsorship relief primarily applies to direct financial support but may also cover other forms of indirect assistance provided under sponsorship agreements. Taxpayers may qualify for the relief by, for example, purchasing equipment for beneficiaries, funding sports scholarships, or partnering with cultural institutions.

Who can benefit?

• The relief is available to CIT and PIT taxpayers involved in CSR activities by sponsoring sports, cultural, or scientific initiatives, both locally and nationally. In some cases, expenses incurred for such purposes may qualify for an additional tax deduction beyond the standard cost recognition.

What are the benefits?

• The CSR relief allows companies to deduct eligible expenses for socially or environmentally responsible initiatives from their taxable income. This mechanism reduces the overall tax liability, boosting cash flow. The relief is especially beneficial for enterprises that invest in CSR, enabling them to retain a larger portion of their earnings and reinvest the funds into continued business development.