You are about to embark on the skills sponsorship with your company and are you eager to offer your employees the opportunity to get involved with associations of general interest? Except that tax and legal issues have never seemed so nebulous to you?

Learn more about the tax deduction and tax reduction associated with skills sponsorship in this article.

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Skill sponsorship: what you need to know before you start

Are you about to embark on skills sponsorship with your company and are you eager to offer your employees the opportunity to get involved with associations of general interest? But do fiscal and legal issues seem complex to you? In this article, you will find ways to understand the tax deduction and the tax reduction linked to skills sponsorship.

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Skills sponsorship: what is it?

Skills sponsorship consists, for a company, in freely supporting (without compensation) a cause of general interest, through a financial donation, equipment or even skills.

Skills sponsorship is therefore one of the applications of corporate sponsorship. It can take two forms: service delivery and labor lending.

• The provision of services: the company is committed to carrying out a specific mission, which it will manage alone, for the benefit of an organization of general interest. For example, it may be the creation of an advertising campaign for an association by a communication agency or the rehabilitation of a building by a construction company.
• Labor loan: the company provides one or more employees to an organization eligible for sponsorship. It is the organization that leads the mission and can act as a functional authority in this context.

In both cases, the mission takes place over two timelines: short term or long term. Short-term skills sponsorship generally consists of “helping” solidarity actions carried out over a few hours. Long-term sponsorship, on the other hand, is carried out on a full-time basis and involves specific professional skills.

This type of approach is only implemented during the employee's working time, who thus receives his salary and benefits from the same advantages as in his company (health insurance, leave, etc.). Note that skills sponsorship must remain free and cannot be imposed on employees.

Seniors are particularly inclined to engage in long-term skills sponsorship, generally for 1 to 3 years.

For consultants, solidarity intermission also has its advantages. This form of commitment consists in mobilizing around skills sponsorship missions, during off-peak periods (onboarding, inter-contract, etc.).

Note that skills sponsorship is aimed at all companies, regardless of their size and turnover.

Skills sponsorship is a good way to engage your employees and can be added to other engagement formats such as volunteering, solidarity leave, financial donations, in-kind donations through collections, awareness-raising workshops and solidarity team building...

Note: skills sponsorship is governed by article L. 8241-2 of the Labor Code on non-profit labor loan operations.

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Skills sponsorship and volunteering: what are the differences?

Skills sponsorship falls within the legal framework of corporate sponsorship. As a reminder, it consists in the company making its employees available for the benefit of a cause of general interest, during its working time.

Contrary to popular belief, the difference between skills sponsorship and volunteering does not lie in the type of action carried out. The question to ask yourself to be able to distinguish them is: does this action take place during or outside of work?

A solidarity action Whatever it is (distribution of meals, marauding, renovations of premises, tutoring, etc.) falls within the framework of skills sponsorship as long as it is carried out during working time, for the benefit of a cause of general interest.

Employees can therefore share their professional skills or devote a few hours to an association.

As soon as a solidarity action is carried out during the employee's free time, it is a volunteer mission (even if it consists in sharing skills).

As you will have understood, it is not the nature of the action that defines whether it corresponds to the sponsorship of skills, but the timeframe of implementation.

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The tax exemption of skills sponsorship

When a company subject to taxation in France makes its employees available, as part of skills sponsorship, to an organization of general interest, it benefits from a reduction in corporate tax or income tax.

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How do I calculate the amount of the donation?

• For short missions: Donation in skills sponsorship = cost of the employee's gross hourly wage * + employer contributions x the number of hours spent on the mission.
• For long missions: Gross paid salary paid over the duration of the mission* x% of the working time spent in association. If the employee only spends 30% of their working time in association, then 30% of their salary is considered for the calculation.

Note that the 2020 Finance Act now imposes a maximum gross salary of €10,998/month, or €606/day.

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How do I calculate the tax credit for this donation?

The tax credit for skills sponsorship is equal to:

• 60% of the amount for the fraction of the donation less than or equal to €2 million,
• 40% of the amount for the fraction greater than €2 million,

up to a limit of 0.5% of the company's turnover excluding taxes or €20,000. If the amount of expenses incurred exceeds the limit of 0.5%, only the fraction of expenses corresponding to this limit is eligible for the tax reduction (article 238 bis of the CGI).

Note: all companies can support the projects they want and thus benefit from the tax advantage associated with sponsorship. Indeed, the turnover and the amount of the donation are free.

Find the detail of the general regime of skills sponsorship.

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How do you justify your donation?

The tax reduction for donations made to eligible organizations as part of sponsorship is not subject to the production of receipts by corporate sponsors.

However, it is up to the donor company to provide proof that it has made a payment that meets the conditions provided for in article 238 bis of the CGI: reality of the donations, amount of the payment, identity of the beneficiary of the donations, identity of the beneficiary of the donations, nature and date of the payment.

Regarding the donation as a sponsorship of skills, the company justifies its donation with a certificate issued by the association including:

• the identity of the association;
• that of the donor company;
• the date (s) of the mission;
• the description of the mission;
• the name of the employee;
• the number of hours given.

Note: it is the company's responsibility to calculate the amount of the donation based on the number of hours donated per employee.

It is possible to export directly from the Komeet platform the details of solidarity actions carried out through skills sponsorship, namely:

• The name of the beneficiary association;
• The date and duration of the mission;
• The collaborator who carried out the mission.

A considerable time saver!

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And the administrative formalities in the company?

A labor loan is always governed by two legal documents that should not be forgotten: the amendment to the employment contract of the employee who undertakes, as well as a sponsorship agreement.

The amendment to the employment contract indicates the nature of the mission carried out (schedule, location, tasks performed, etc.). This document is mandatory.

The sponsorship agreement specifies the commitments of each of the 3 parties concerned and the characteristics of the donation. It is essential that each of them signs the document to formalize the action. This document is not mandatory, but highly recommended.

Find out here 10 examples of skills sponsorship missions to be carried out with his company.

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Tax exemption from skills sponsorship: what you need to remember

As soon as a sponsorship action is carried out during working time, it may give rise to a tax deduction. The tax exemption process is simple and will mainly be based on the number of hours that the employee spent on a solidarity mission and on a tax receipt issued by the beneficiary association.

Do you want support in setting up skills sponsorship in your company?

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