Tax Incentives for Cross-border Giving in an Era of Philanthropic Globalization: A Comparative Perspective

AuthorNatalie Silver & Renate Buijze
PositionLecturer, University of Sydney Law School/Researcher, Erasmus School of Law, Erasmus University Rotterdam
Tax Incentives for Cross-Border
Giving in an Era of Philanthropic
Globalization: A Comparative
Natalie Silver* and Renate Buijze**
e 21st century has ushered in an era of philanthropic globalization marked by a
signif‌icant rise in international charitable giving. At the same time, cross-border
philanthropy has raised legitimate f‌iscal and regulatory concerns for government. To
understand how donor countries have responded to this changed global philanthropic
landscape, we use comparative tax methodology to develop a spectrum of approaches
to the tax treatment of cross-border giving and apply tax policy criteria to critically
evaluate the divergent approaches of Australia and the Netherlands, located at opposing
ends of the spectrum. Findings from the comparative analysis reveal that in the current
global environment for philanthropy there is a strong case to be made for allowing tax
deductible donations to cross borders.
* University of Sydney Law School.
** Erasmus School of Law, Erasmus University Rotterdam.
We are grateful to Sigrid Hemels and Myles McGregor-Lowndes for their
valuable comments on earlier drafts of this paper.
Silver & Buijze, Tax Incentives for Cross-Border Giving
I. I
II. C T M A I A T T T T
O C-B D
III. D A S O A T T T T O C-
B D
IV. E T D A U T P C
A. Descriptive Country Comparison
1. Australia
i. Tax Incentives for Cross-Border Donations
ii. Regulatory Measures Governing Cross-Border
Charitable Activities
2. e Netherlands
i. Tax Incentives for Cross-Border Donations
ii. Regulatory Measures Governing Cross-Border
Charitable Activities
B. Identif‌ication of Similarities and Dif‌ferences
1. Tax Incentives for Cross-Border Donations
2. Regulatory Measures Governing Cross-Border Charitable
C. Evaluation
1. Ef‌f‌iciency
2. Equity
3. Simplicity
4. Policy Consistency
5. Sustainability
V. C
I. Introduction
Almost every member of the Organisation for Economic Co-operation
and Development (“OECD”) Development Assistance Committee
(“DAC”)1 has tax incentives to encourage domestic philanthropy. ese
tax incentives, typically in the form of a tax deduction or tax credit, have
1. e DAC of the OECD is an international forum of the major countries
that provide aid, online: OECD .
(2020) 6 CJCCL
the potential to lower the price of giving, increasing both the amount
donated to nonprof‌it organizations2 and the number of donors.3 Until
quite recently, these tax incentives generally did not extend to cross-
border philanthropy4 notwithstanding their signif‌icance for nonprof‌its
engaged in international charitable activities. e transformation of the
global philanthropic landscape in the 21st century, marked by a rise in
both the amount of international giving and the form that giving takes,5
has forced donor countries to consider the provision of tax incentives for
cross-border donations. As national boundaries around philanthropy have
started to blur, governments are struggling to maintain an appropriate
balance between protecting the interests of the f‌iscal state (including the
2. e term ‘nonprof‌it organization’ (“NPO”) will be used throughout
this paper to refer to ‘not-for-prof‌it organization’, ‘non-governmental
organization’ (“NGO”) and ‘charities’ (a subset of NPOs that have been
acknowledged by the state as meeting either the common law or statutory
def‌inition of charity depending on the jurisdiction).
3. See e.g. John Simon, Harvey Dale & Laura Chisolm, “e Federal Tax
Treatment of Charitable Organisations” in Walter Powell & Richard
Steinberg, eds, e Non Prof‌it Sector: A Research Handbook, 2d (New
Haven: Yale University Press, 2006) 267 at 272; Joseph Cordes, “Re-
inking the Deduction for Charitable Contributions: Evaluating the
Ef‌fects of Def‌icit-Reduction Proposals” (2011) 64:4 National Tax Journal
1001 at 1003; Charles Clotfelter, Federal Tax Policy and Charitable Giving
(Chicago: University of Chicago Press, 1985) at 281; Roger Colinvaux,
Brian Galle & Eugene Steuerle, Evaluating the Charitable Deduction and
Proposed Reforms (Washington: e Urban Institute, 2012) at 9.
4. Def‌ined as a charitable gift from a donor in one jurisdiction to a recipient
in another. is term will be used throughout this article interchangeably
with ‘international philanthropy’ and ‘international giving’.
5. In the two decades from 1997 to 2017, private philanthropic f‌lows for
development grew from approximately USD $7.1 billion to USD $40.9
billion. See “Grants by Private Agencies and NGOs” (2019), online:
DOI: <10.1787/a42ccf0e-en>. e Hudson Institute estimates that in
2014 private philanthropy from DAC donors to developing countries
was as high as USD $63.7 billion. See Center for Global Prosperity, e
Index of Global Philanthropy and Remittances 2016 (Washington: Hudson
Institute, 2016) at 6.

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