Research On The Preferential Policies Of Corporate Income Tax For Promoting Public Welfare Donations

Practice has shown that philanthropy in the new era is playing an irreplaceable role in the third round of distribution and in advancing the great practice of common prosperity.As a part of charity,charitable donation can narrow the gap between the rich and the poor to a certain extent,make up for market failure,and promote the development of various social undertakings.According to the data in recent years,enterprises have always been the main body of charitable donations.Therefore,it is of great significance to explore the enterprise income tax preferential policies to promote charitable donations to promote the improvement of tax incentive system,stimulate the enthusiasm of enterprises for charitable donations and create a good social environment.Most studies at home and abroad show that preferential tax policies will encourage corporate charitable donations.When making charitable donations,companies have different motivations,including social responsibility,political motivation and profit maximization.Classical theories such as positive externalities,market failures and tax leverage provide abundant theoretical support for the government to introduce a series of tax preferential policies to encourage charitable donations by enterprises.From 2012 to 2020,the total amount of social donations and corporate donations showed an overall upward trend.In particular,the outbreak of COVID-19 in 2020 stimulated a substantial increase in the total amount of corporate charitable donations.Our preferential corporate income tax policy on promoting charitable donations can be divided into three stages.Under the current regulations,the part of corporate public welfare donations that does not exceed 12% of the total profit is allowed to be deducted before tax.After comparing the development status with the current policy,the paper found that there are still some shortcomings in the tax incentive system which may restrict the enterprise’s charitable donation behavior,such as the tax deduction ratio is not subdivided,the preferential tax policy of non-monetary donation is not perfect and so on.In order to investigate the impact of tax incentives and net profit on corporate charitable donation expenditure,this paper takes listed companies as the research object and uses an empirical method for analysis.The results show that the pre-tax deductibility limit of corporate charitable donation expenditure,net profit and the year of COVID-19 have a significant positive effect on corporate charitable donation expenditure.In addition,the United States,Britain,Japan and other countries’ philanthropic development is mature,and its tax policy has certain reference significance to our country,we can take the essence of its charitable undertakings.Finally,based on the current development situation,empirical analysis and foreign experience,this paper puts forward three suggestions on improving the corporate income tax preferential policy for promoting charitable donations: We will timely adjust the proportion of pre-tax deductions for corporate income tax,improve the policy of pre-tax deductions for non-monetary donations to public welfare,and appropriately expand the scope of eligibility for pre-tax deductions for public welfare social organizations,so as to further promote the vigorous development of philanthropy in the new era in China and more firmly promote common prosperity.