Research On The Incentive Effect Of Corporate Charitable Donation Income Tax Policy

As China’s reform and opening-up continues and the economy enters a state of new normal,the social and economic development has presented new requirements and features.Under this circumstance,public charity activity,which is closely related to the third distribution,is playing an increasingly important role in creating social benefits and maintaining social stability.Therefore,the development of Chinese charities has attracted the attention of the public.The Charity Law of the People ’s Republic of China,which implemented in2016,and the Corporate Income Tax Law of the People’s Republic of China,which revised in 2017,stipulate that corporate charitable donations,which exceed 12% of the total annual profits and are not deducted,shall be allowed to be carried forward and calculated within three years.This reform in corporate income tax policy has greatly affected corporate charitable donations.Against this background,this thesis explores the influence of the corporate income tax policy on charitable donations and the incentive effect of the reform.This thesis adopts a combination of qualitative and quantitative analyzing methods to probe the tax incentives for corporate charitable donations,review corporate philanthropy enterprise income tax incentive policies at home and abroad and analyze the income tax incentives for corporate philanthropy of 16790 data listed companies trading in China’s A-shares from 2013 to 2019.The empirical analysis suggests that the reform of corporate taxation about charitable donations in 2016 has had a positive incentive effect on corporate philanthropy;corporate net profit,effective enterprise income tax rate,and corporate scale are all positively correlated with corporate philanthropy;the factors that affect corporate philanthropy of state-owned enterprises and non-state-owned enterprises are different,and the incentive effect of the tax policy is different for enterprises with different enterprise property rights;optimization of the pre-tax deduction method,deduction ratio,carry-over period,etc.of the income tax policy for corporate philanthropy in China will encourage enterprises to increase their donation for public warfare.Drawing lessons from international experiences and in view of governing the country with law and moral,this paper provides ideas and specific methods in advancing Chinese philanthropy.From the perspective of the formal system,this paper puts forward the following suggestions: to improve the institutional environment of corporate charitable donation policy,to refine the non-monetary charitable donation form,to optimize the pre-tax deduction method and carry-over period,to implement the differential deduction policy,to improve the recognition and management mechanism of charities with pre-tax deduction qualification,to improve the tax incentives of donation when emergencies happen.From the perspective of the informal system,this paper also puts forward the following suggestions: to create a healthy cultural environment,to advocate the management of corporate charitable donation,etc.