Study Of Tax Incentive System Of Philanthropy In China

Since the reform and opening, in the process of transition from planned economy intomarket economy, caused and intensified many social conflicts because the social incomedistribution system is imperfect. As an important part of the income distribution system tocompensate for market failure and government failure, the charity which be called “the thirddistribution”, is the balancer of the wealth gap, help to optimize the allocation of resources,promote social harmony. Compared with European and American developed countries, thedevelopment of philanthropy of China is clearly backward, charities bear a higher tax burdenand pressure to survive, personal donation awareness is weak, the scale of charitabledonations is small and scattered. To eliminate these barriers and promoting development ofphilanthropy is depending on the guidance and support of tax policy.Since the1990s, the development of philanthropy developed a number of policies, manyof them are tax measures. However, China’s charity legislation is not perfect, resulting inphilanthropy can not break through the bottleneck of the development in long time, it isnecessary to attach importance to, today when we are advocating to build a harmonioussociety. This paper introduce and analysis the deficiencies of our charity legislation, learnfrom the successful experience of some countries and places, and make appropriaterecommendations to our charity legislation.Therefore, combine charities and tax theory,studied in detail the mechanism and effectsof taxation to charity, on the basis of investigating and analyzing the philanthropydevelopment status in China and the current tax system in depth, made comparison andreference to the tax incentive system for foreign charities, proposed the idea of establishingthe overall framework of charitable tax incentives, and thus propose the recommendations tothe future of China’s charity tax incentive, become the main contents of research of thispaper.