Research On Perfecting Income Tax Preferential Policies Of Corporate Public Welfare Donations In China

2008 is known as China’s "first year of charity".Due to major natural disasters that year,the amount of national charity donations has increased significantly.It was also in this year that China’s corporate income tax policy for charity donations has undergone major changes.The promulgation of the Charity Law of the People’s Republic of China in 2016 gave public welfare undertakings a law to follow.In 2017,in order to align with the Charity Law,the corporate income tax has made a new provision that “allows carry-over deductions for the next three years”.With the rapid development of China’s economy,the development of public welfare undertakings has also reached a new level in recent years.The Fourth Plenary Session of the 19 th Central Committee of the CPC clearly stated that it is necessary to "pay attention to the role of the third distribution and develop social public welfare undertakings." Under such circumstances,it is very important to make taxation policies to promote the development of public welfare undertakings,especially for enterprises that are the main force of donations,they should be encouraged with scientific and effective tax preferential policies.Thus,it is of great significance to explore how to perfect the corporate income preferential tax policies to encourage enterprises’ donation behavior.This paper takes the third distribution theory,social responsibility theory and tax effect theory to build the theoretical foundation.And then use literature analysis method to analyze the present situation of public welfare donations and the preferential corporate income tax policies for charitable donations in China.And through empirical analysis,a two-way fixed model is established to explore the policy effect of the tax incentive policy implemented in 2017 for public welfare donations that the expenditure can be carried forward and deducted in the next three years.Then I summarize the existing problems of these tax preferential policies including the imperfect design of tax system,the imperfect evaluation system for the value of non-monetary donations,the excessive restrictions on the deduction of corporate public welfare donations,and the insufficient policy regulation of emergency public welfare donation preferential policies.Finally,in order to improve the construction of China’s tax system and promote the development of the public welfare undertakings,I combine theoretical analysis and empirical analysis and draws on foreign experience putting forward the following policy suggestions: we should continue to further improve the design of tax system,improve the non-physical donations value evaluation system,reduce the restriction conditions for enjoying preferential benefits,and strengthen the standardization of emergency policies.