How are online jackpots taxed? After the controversy over the merits of the fund to support the family of the policeman who killed Nahel during a traffic control, many wonder about the taxation that will be applied. If the question of small pots is not generally raised, this one raised more than 1.6 million euros thanks to more than 82,000 donations.
From a tax point of view, the situation is more complex than it seems. In principle, all donations must be declared for tax purposes and are subject to gift tax. You must also make this statement, even if the donation in question is exempt. However, when the donation does not come from your family, there is no exemption (except for some special cases but which do not apply here) and a rate of 60% is applied without any reduction (for the case here we are interested).
In other words, if we follow this reasoning, the Treasury should recover approximately 960,000 euros of the approximately 1.6 million euros. To this are added the pot fees that are, in Gofundme, the corresponding collection platform, 2.9% to which must be added 0.25 euros per donation, as Gofundme explains on this page. That’s 66,900 euros of expenses in total (46,400 + 20,500 euros). The family of the policeman in question would then recover just over 573,000 euros.
Certainly there are exemptions on certain donations, and in particular for the military, firefighters, gendarmes, police and customs officers injured or killed in the performance of their mission, as the tax site reminds us here. But “we are not at all in this case, clearly”, explains to BFM Business Frédéric Douet, professor of tax law at the University of Rouen-Normandy and member of the Council of compulsory levies.
Payments more similar to regular gifts
More generally, this donation reasoning is not necessarily valid from a legal point of view. “Legally, to be in the presence of a gift, the donor must be animated by a liberal intention towards the recipient -the one who receives- and who impoverishes himself for the benefit of the latter. There are hypotheses in which a person is encouraged by a liberal intention without impoverishing himself: birthday gift, tip, collection during a religious service…”, recalls Frédéric Douet.
Payments are then considered regular gifts. “Expenses for food, subsistence, education, apprenticeship, ordinary equipment expenses, wedding expenses, and customary gifts should not be reported, unless the party wishes otherwise. The nature of the present of use is assessed on the date on which is granted and taking into account the fortune of the settlor”, as specified in article 852 of the Civil Code.
Furthermore, there is no specific threshold in this area. A gift of 30,000 euros from a billionaire may well be considered a gift of use, while the same amount will be compared to a donation from the tax authorities for the middle classes, for example.
An average payment of less than 20 euros
“It is possible to follow the same reasoning with respect to kittens online which are nothing more and nothing less than the modern version of the envelope that circulated during, say, a birthday. The lump sum can be significant, but each payment taken separately it is not. It does not constitute an impoverishment of the person who does it”, considers Frédéric Douet.
Especially since the average payment for this kitty, just under 20 euros, is still relatively modest. However, the question could arise about certain payments within this kit that sometimes reached several thousand euros, as BFM journalists were able to observe before the kit was closed.
Another element could be advanced: is it a donation if we take into account that the payment of 1.6 million euros is made in one go to a beneficiary? So we could estimate that it is the Gofundme company that makes a donation. But according to Frédéric Douet, that doesn’t hold up.
On these questions, the tax authorities seem rather embarrassed no matter what. Especially since there is no jurisprudence to rely on. No one at the Direction générale des finances publiques was immediately available to answer our questions.
Source: BFM TV
