Donation Agreement

Donation agreement – a professional template in Word format

A donation agreement is concluded when a company, a sole trader or a private individual gives money, goods or services to an association, institution or foundation for a public benefit purpose – children’s sport, a cultural programme, a humanitarian campaign, equipment for a school or a hospital. Unlike sponsorship, the recipient provides no publicity or other service in return, and it is precisely that difference which determines how the donation is recorded in the books and treated for tax purposes.

A donation is by its nature a gift, governed by the Obligations Act (Zakon o obveznim odnosima), while the recognition of the expense for tax purposes is governed by the Corporate Income Tax Act (Zakon o porezu na dobit) or the Income Tax Act (Zakon o porezu na dohodak). The template is written so as to cover both – the contractual relationship between the donor and the recipient, and the paperwork required by the Porezna uprava (Croatian Tax Administration).

Key features

• Professional template – 7 articles covering the subject of the donation, its purpose, an express clause on the absence of any consideration, the manner of payment, reporting and public thanks.
• Practical reliability – the purpose is tied to the recipient’s objects as set out in its statutes, which is a condition for the expense to be recognised for tax purposes.
• Easy customisation – options for donations of money, goods and services, plus an optional article on reporting, which you keep or delete as required.
• Digital delivery – the DOCX file with instructions and a tax note arrives by e-mail immediately after purchase.

What the template includes

• Details of the donor (company, sole trader or private individual) and of the recipient, including its objects as set out in the statutes or the founding instrument
• The subject of the donation with three options – a sum of money, goods as specified in an annex with their estimated value, or services with their estimated value
• An article on the purpose of the donation and on the recipient’s obligation to use it exclusively for that purpose
• An express clause that the donation is given without any consideration and that the recipient undertakes no promotional service whatsoever
• Payment to an IBAN within a deadline or in instalments, or handover of the goods and services with a handover record
• An optional article on a report on the use of the funds for the stated purpose and the donor’s right to claim back any part not used for that purpose
• An article on public thanks – the recipient may thank the donor publicly, but the thanks are voluntary and do not constitute consideration
• Instructions for completion with the tax cap, a VAT note for donations of goods and a list of the documentation required by the tax authority

Who is this template intended for

• Companies and sole traders who donate to associations, schools, nurseries, hospitals or religious communities and want a properly recognised tax-deductible expense.
• Associations, foundations and institutions which receive donations and need a written record of the purpose of the funds.
• Private individuals who donate a larger amount and want it to be clear what it is intended for.
• Donors of goods – equipment, food, materials – who need a specification and a handover record.

Important: if the recipient displays your logo in return, posts about you on social media or promotes you at an event, this is no longer a donation but sponsorship – in that case a sponsorship agreement is used and different tax rules apply.

If the recipient provides publicity in return, the right document is the sponsorship agreement template. We explain the difference between the two arrangements, their tax treatment and the documentation in our guides ugovor o donaciji (donation agreement) and sponzorstvo i donacija (sponsorship and donation).