Research On Income Tax Incentive Policy Of Charitable Donation In China

The third distribution can effectively promote the realization of common prosperity,which is the common goal of all people in China,and the main means is charitable donations.Charitable donations effectively helped the government to complete the epidemic prevention and control work and ensure the supply of epidemic prevention and control materials nationwide,which fully confirms the importance of charitable donations in social and economic development.The main body of charitable donations in China is the enterprise,so by improving the tax policy can stimulate enterprises to carry out charitable donations,which can also effectively promote the development of China’s charitable undertakings and promote the realization of the goal of common prosperity.This paper studies the income tax incentive policy of charitable donations in China,studies the results of domestic and foreign research on this issue,statistically analyzes the current situation of charitable donations and related tax policies in China,and summarizes and outlines the problems of the current income tax incentive policy related to charitable donations in China’s tax policy,which mainly include the imperfect tax legislation of charitable donations in China,the inadequacy of the pre-tax deduction provisions of charitable donations in income tax,and the shortcomings of the income tax policy.The main problems include the imperfect tax legislation of charitable donations,the lack of pre-tax deduction for charitable donations in income tax,and the lack of strict income tax collection and management of charitable donations.Therefore,the data of China’s A-share listed companies from2011-2021 were selected as a sample to study and analyze the incentive effect of China’s tax policy on charitable giving behavior and the main influencing factors of charitable giving behavior conducted by enterprises.It is found that income tax incentives have a significant positive impact on corporate charitable behavior,i.e.,effective tax incentives can motivate corporations to engage in charitable giving behavior.Subsequently,drawing on the tax incentives of other countries regarding charitable donations,we compare and analyze them with the situation in China and find that they have lenient eligibility criteria for charitable organizations eligible for tax incentives,diversified forms of charitable donations for pre-tax deduction,and their charitable donations are taxed strongly.Finally,this thesis puts forward several suggestions for optimizing the income tax incentive policy for charitable giving in China based on the above research.First,expand the scope of charitable donations in China’s income tax incentives,which specifically includes standardizing the legal system of charitable donations in China and increasing the forms of charitable donations that can be deducted before tax in China.Second,optimize the pre-tax deduction system for charitable donations in China,including improving the pre-tax qualification and management mechanism of charitable organizations in China and improving the pre-tax deduction ratio and deferred carry-forward provisions.Third,to strengthen the income tax administration of charitable donations in China,including improving the way of charitable donations in China and promoting the modernization of tax administration in China.