A Study On The Taxation Of Non - Governmental Organizations In China

During the current global society,along with the capital flow as the sigh of economical globalization, comes the trend of transnational civil society, also known as the global revolution of association, which means an increasing presence of international non-governmental organizations. To China, after the reform and opening up, 1978,a large amount of overseas non-governmental organizations(namely international non-governmental organizations from China mainland’s perspective, including foreign NGOs and NGOs from Taiwan, Hong Kong and Macau, hereinafter referred to as “INGOs”) has begun to coming into China, which brings about not only funds and volunteering spirit, but profoundly improvements to fields like medical treatment, education, poverty relief etc. However, INGOs has also brought potential menace to China’s domestic safety and political stability. So it is crucial to build the legal framework of INGOs where regulations on taxes play an essential role.The first part introduces the fundamental theory about both NGOs and INGOs, especially the definitions, taxonomy, and characteristics. Apart from some basic characteristics NGOs and INGOs sharing, like non-governmental, non-profitable, organizational, public beneficial or mutual beneficial, autonomous and legal status, there is also transnational character which belongs to INGOs only. Then comes the introduction of theories on why NGOs should be levied taxesThe second part is about China’s taxation systems regulating NGOs which are made up of three forms: foundations, social groups and private non-enterprise entities. Only if INGOs incorporated in the forms of foundations and foreign chambers of commerce should they get legal status, hence, such a taxation system is applied to them. Besides, from the basic regulations of such a system, we may have access to the lawmakers’ view towards NGOs(INGOs inclusive). The current taxes levied on NGOs are mainly about corporate income tax, turnover tax, and tariff. There have also been regulations about the procedures of tax collection. After the taxation obligations come into being, files should be made to the tax registration authority. In one word, regulations on taxes levied on NGOs are fragmental, and the taxation preferences are very limited, so even such a system are not applied to most of the INGOs due to the lack of legal status.The third part talks about how the current taxation system applies to INGOs. The current NGO taxation systems are linked closely to the incorporation registration of an organization, but most of the basic regulations on NGOs cannot be incorporated by aliens and foreign corporations, which results in the incapability of INGOs’ being covered in the domestic taxation systems regulating NGOs.The fourth part is the comparative research on the administrative system on INGOs and regulations on tax-exempt organizations in US. MNCA,the ABA Model Nonprofit Corporation Act,opens to INGOs on registration, though MNCA is just a model but adopted by most of the states in US. Regulations on tax-exempt organizations are mainly stipulated in The US Tax Code article 501(c) 3, no matter if it is incorporated in or out of the US.The fifth part gives advices about taxation administrations on INGOs. The author proposed three kinds of suggestions: to give INGOs legal status, to modernize regulations on taxes levied on NGOs, and to enhance the administration on the tax collection on NGOs including INGOs.