Research On The Improvement Of Tax Preferential System Of Charitable Trust In China

In 2001,the "Trust Law of the People's Republic of China"(hereinafter referred to as the "Trust Law")was promulgated and implemented,first proposed the concept of "public trust",and briefly described the operation and supervision of its various links,but the development of trust in China Among them,the “public welfare trust” has been developing slowly.Until 2016,the National People's Congress passed the "Charity Law of the People's Republic of China"(hereinafter referred to as the "Charity Law"),as part of the "Charity Trust",the concept of "charity trust" was proposed.As a combination of charity and trust,the “charity trust” can use the advantages of the trust to contribute to the flourishing development of China's philanthropy,so it has received extensive attention from the society.2016 is also regarded as the first year of charity trust.The “Management Measures for Charitable Trusts” issued in 2017 provides more detailed rules on the management and supervision of charitable trusts,and provides institutional guarantees for the healthy development of charitable trusts.But so far,our country's laws only stipulate in principle that charitable trusts can enjoy tax incentives,but there are still some shortcomings in the construction of specific systems,and there are many shortcomings.From the development experience of the international world charity trust,tax incentives can stimulate and promote the cause of charitable trusts.China's charitable trust is still in its infancy.Therefore,the basic tax system and the tax incentive system for charitable trusts cannot be improved.Judging from the basic principles of taxation,charitable trusts enjoy the legitimacy of tax incentives,which are in line with the principle of tax fairness and the principle of tax efficiency.The principle of tax fairness is reflected in the requirement that the taxpayer's tax amount is directly proportional to the public welfare it consumes,and also that the taxpayer's tax burden should be equal to the burden it can afford.On the one hand,the ultimate purpose of charitable trusts is charity.The operation of charitable trusts not only does not consume social resources,but also assumes social responsibility and provides social welfare.On the other hand,the ultimate flow of charitable trust property and income is unspecified groups and individuals who need financial assistance.Their economic affordability is weak in itself,so their enjoyment of tax incentives is justified and reflects substantial fairness.At the same time,the charitable trust's contribution to charity has also supplemented the government's functions to a certain extent.Giving charitable trusts certain tax benefits can simplify the way in which government tax collections are implemented,helping the state save on taxation costs.According to China's current tax system,the parties of charitable trust may involve tax issues in the establishment,survival and termination of charitable trusts,mainly related to corporate income tax,personal income tax,value-added tax,deed tax,stamp duty,property tax and other taxes.However,due to the current imperfect tax system,the tax incentives for charitable trust business in China basically apply the tax incentives for public welfare undertakings.However,charitable trusts have different specialties from traditional public welfare undertakings.The preferential rules do not fully enjoy the tax benefits that should be enjoyed.At this stage,there are many shortcomings in the tax incentive system of China's charitable trusts.China adheres to the principle of "one thing,one right",and China has not paid attention to the conflict with the "dual ownership" of the Anglo-American legal system when transplanting the legal system of trust,which makes the charitable trust in China have the problem of double taxation.Another important issue at this stage is that compared with charitable organizations,trust companies that are trustees have completed the independence and enthusiasm of charitable trusts.The main reason is that trust companies do not have the qualification to issue donation invoices,and they are trusts of financial institutions.The tax benefits enjoyed by the company itself are also insufficient.Therefore,in practice,in order to legally enjoy tax benefits,charitable trusts often adopt a model of cooperation between charitable organizations and trust companies,which will slow down the development speed of charitable trusts to a certain extent.The lack of the subject qualification procedure for charitable trust tax incentives and the imperfect supervision system to prevent the abuse of tax incentives are also issues that cannot be ignored.The United Kingdom is the world's oldest country in the development of charitable trusts.The United States has completed the transition from traditional trusts to modern trusts.Japan is one of the earliest and most successful countries in the civil law countries.The development of the trust tax incentive system provides valuable lessons for the improvement of the charity trust tax incentive system.First of all,China should expand the scope of tax incentives for charitable trusts,and include trust companies in the scope of tax incentives.During the period of running charitable trust projects,they should enjoy the same subjective treatment as charitable organizations within the scope of the project,and give them eligibility to issue donation notes when they do charitable trust business.Secondly,it is necessary to increase the tax incentives for charitable trusts in China,mainly to increase the pre-tax deduction of charitable trust clients,and to improve the preferential policies for taxes such as value-added tax,income tax,deed tax and stamp duty,property taxes and urban land use taxes involved in the establishment,survival and termination of charitable trusts.Thirdly,the method of determining the tax incentives of charitable trusts in China should adopt a strict review system.After the establishment of charitable trusts,the trustees must take the initiative to apply to the tax authorities for the qualifications of tax incentives.The tax authorities are obliged to review the materials.And filed with the Ministry of Finance and the China Banking Regulatory Commission.Finally,the improvement of the charity trust tax preferential supervision system not only requires the civil affairs department and the taxation department to establish an inter-departmental supervision and coordination mechanism,strengthen communication,but also requires the trustee of the charitable trust to disclose the financial situation and taxation status of the charity trust to the public and consciously supervised by the society and citizens.