Research On The Income Tax Policy Of Charitable Donations

At present,China is in the new stage of reform and development,but many problems are restricting China’s economic and social development.These problems include regional disparities and the huge income gap between the rich and poor.Social vulnerable groups(such as the elderly,women and children and people with disabilities)lack adequate physical and mental security.In the field of health care,education,environmental protection and technology,the government is increasingly unable to fix all the problems.Because of the above problems,our government is seeking solutions urgently.Our country is attaching more and more importance to the development of philanthropy,and has put forward the goal of promoting the development of charity in China.Many tax incentive policies for charitable giving have been introduced.Charitable giving from corporations and individuals can not only provide financial support for charitable organizations but also have the function of "the third distribution" for regulating the income distribution gap,easing social contradictions,and promoting social fairness.What’s more,it can help the government to provide public goods.In conclusion,improving the tax incentive policies for charitable giving will be a good way to solve all the problems that our country now faces.Our current charitable giving tax policy mainly consists of the following two parts.One is the pre-tax deduction qualification of charity organizations.The other is the tax deduction policy for corporations and individuals’ donations.Tax incentive policies include income tax,stamp tax,value-added tax,consumption tax and other taxes in which income tax policy has largest numbers and is also one of the most incentive taxes.Both our country and foreign countries have made a series of preferential policies on charitable giving in both corporation income tax and individual income tax.However,there is still a big gap between the development of philanthropy in China and the foreign countries.One of the important reasons is that there are still many defects and deficiencies in China’s charitable donation income tax policy,which makes it play a limited role.In terms of the qualification of pre-tax deduction for charitable organizations,China’s current standards are too strict and the follow-up supervision is weak.In terms.of the specific provisions of income tax policy,there are many problems in it,such as deduction method,deduction ratio and deduction of basis.Income tax policy in our country has various problems.Under the background of various problems for charity,based on the actual situation of our country,using the method of comparative analysis and empirical analysis,this paper discusses how to perfect our country’s charitable donation income tax policies to better promote the development of charity and philanthropy.This paper is divided into six parts:The first part introduces the background and significance of the thesis.By summarizing the research results of relevant fields at home and abroad,this part summarizes the opinions and contributions of scholars at home and abroad on the income tax policy of promoting charitable giving.Finally,this part introduces the research methods and points out the innovation points and shortcomings of this paper.The second part expounds the theory of how the government spending and tax policies promote charitable giving.Firstly this part introduces the connotation and functions of charity.Secondly it analyses the role of government spending on charitable donations.Finally from a cost benefit view,it analyses the influence of different income tax policies on charitable giving.The third part mainly analyses China’s present situation of the income tax policy.From the aspects of corporation income tax and personal income tax,this part implements the related tax policy in China.Through the establishment of empirical model this part analyzes the effect of tax policy and how government spending crowds out charity giving.The fourth part analyzes the practical problems existing in China’s current income tax policy for charitable donations.It mainly includes four aspects.The fifth part mainly analyses the charitable donation income tax policy of international experience for reference.Firstly it respectively analyzes the charitable donation income tax policy of the United States,Britain and Japan.Then according to the actual situation of our country,this part summarizes some experiences and lessons that our country can learn.The sixth part is the advice of how to perfect the income tax policy for charitable giving in our country.Aiming at the problems existing in the current charitable donation income tax policy in China,and combining with some international experiences,a total of four suggestions are put forward.First,we should improve the income tax policy of charitable giving in our country to connect with charity law as soon as possible.Then some specific suggestions should be given to improve and adjust the income tax policy of our country.Thirdly,our country should establish the supervision mechanism of "wide entry and strict supervision",expand the scope of the charitable organization that enjoys pre-tax deduction,and strengthen its supervision.Finally,some supporting measures to promote charitable giving should be improved.