Calls to Estonian donation hotlines for Ukraine not tax-deductible
When donating in Estonia to organizations involved in helping Ukraine, donations by bank transfer to seven nonprofits listed by the Estonian Tax and Customs Board (MTA) are currently tax exempt — . Calls to donation hotlines, however, aren't.
"Phone donations for Ukraine are definitely going to be a problem during [tax season] next year, as nonprofits don't have the names and personal identification codes of people who donated by phone, which are necessary for them to submit an INF 4 form," Airi Lepassar, Tax Audit Unit director and acting media specialist at the MTA, told ERR.
Lepassar explained that organizations that receive donations submit Form INF 4, "Declaration of gifts and donations received" to the MTA, listing the name, personal identification code and donation amount, based on which pre-filled deductions are listed on a physical person's individual tax return.
Those who have donated by phone, however, have to put significantly more effort if they want a refund.
"If the information of the person who donated hasn't been declared on an INF 4 form, then the individual can add the donation amount to their tax return themselves, but they must be able to prove that they have donated to a nonprofit included on the list of [organizations] benefiting from income tax incentives," the MTA unit director explained.
"That can be proven by the nonprofit, either by adding the individual's information to an INF 4 form or by providing them with a proof of donation," she continued. "One can prove that they donated with a phone bill listing to whom a donation was made."
Nonetheless, Annika Oja, service manager in public services at the MTA's Service Department, confirmed to ERR that the board is working together with carriers to figure out how to solve this issue.
"We have been discussing this matter with phone companies to figure out how to get the data necessary to submit INF 4 forms to nonprofits," Oja said. "It's a complex issue and requires developments, but of course it's worth pursuing."
In accordance with an amendment to the Income Tax Act that entered into force this April, donations made between February 24-December 31, 2022 to seven specific organizations providing aid to Ukraine are tax-deductible.
The seven organizations in question are the Estonian Refugee Council, Mondo, the Ukrainian Cultural Center, the National Defense Promotion Foundation, the Estonian Red Cross, the Rescue Association and the Tallinn Vanalinn Rotary Club.
Natural persons can deduct a combined up to €1,200 in donations to nonprofits and foundations included on the MTA's list, home mortgage interest and eligible training costs per year.
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Editor: Aili Vahtla