An Analysis Of The Preferential Income Tax Policy For Corporate Charitable Donations In My Country Under The Background Of Common Prosperit

On August 17,2021,General Secretary Xi proposed the goal of "adhering to the people-centered development ideology and promoting common prosperity in highquality development" at a conference.By building a basic institutional arrangement that coordinates the primary distribution,redistribution,and third distribution,the whole people can make solid progress toward the goal of common prosperity.Common prosperity is the prosperity of all people,which is the goal that everyone should think about and strive for,and the responsibility that every enterprise should take up.As a remedy to narrow the gap between the rich and the poor,charitable donations have played an essential role in achieving the goal of common prosperity.For charitable causes,China has introduced many incentives to encourage and support donations,and in the field of taxation is no exception.China has been committed to revise and improve tax incentives to encourage corporate charitable giving,the most recent policy adjustment occurred in 2017,based on the original "pre-tax deduction of donation expenses up to 12% of total profits" provision,allowing the excess of the current year to be carried forward for deduction for three years.To a certain extent,it reduces the cost of donations to enterprises.It has been five years since the implementation of the policy,and the actual effect of the policy has caused the author to think about it.Based on this background,this paper focuses on the preferential corporate income tax policies related to charitable donations in China through a combination of theoretical discussion and empirical research,and focuses on the impact of the 2017 policy reform on the role of the donations.Through disclosing and analyzing the problems,suggestions are made on the existing tax incentives.This paper is divided into five parts.In the first part,the author reads a large number of domestic and foreign scholars’ literature and conducts a research review,and determines the research focus and line of thought of this paper based on the previous research.The second part analyzes the current situation of charitable giving in China from various perspectives,such as the general situation of giving,the main body of giving,and the field of receiving gifts,and focuses on the enterprises as the main force of giving.The analysis finds that China’s charity business continues to develop and improve as a whole,but the total amount of donations is relatively low compared to the GDP;the form of donations is mainly in cash,supplemented by materials;the supply side is mainly led by private enterprises,and the industry type is led by manufacturing enterprises,followed by individual donations;the demand side is mainly focused on three major industries,namely medical and health,education and poverty alleviation,which are closely related to people’s livelihood.At the same time,this paper lists the income tax incentive policies related to corporate donations in detail,and analyzes them from two perspectives: general policies and special policies.By combing the development history of tax policies and reviewing the policies,the author argues that there are currently imperfect laws and regulations,narrow scope of social organizations eligible for pre-tax deduction,irregular tax incentives for non-monetary donations,and complicated tax incentive processing procedures,so effective reforms should be adopted to further promote corporate donation behavior and develop China’s charitable giving.The third part of this paper uses theoretical analysis to illustrate the incentive effect of tax policy on corporate giving behavior using the three distribution theory,Pareto optimality,cost-benefit and externality theory.In the fourth part of the empirical study,the panel data of 1667 A-share listed companies from 2011 to 2020 are selected,and after determining that 2017 is the structural mutation point of corporate giving behavior using the Zou test,the impact of tax incentives on corporate charitable giving behavior is studied empirically through a two-way fixed effects model and a panel binary choice model,and the impact of tax incentives on corporate charitable giving behavior is explored by grouping different types of enterprises to explore whether there is variability in the degree of response to the policy.The empirical study finds that the tax incentives in 2017 significantly motivate the willingness and scale of charitable giving of enterprises,but the results are not significant in the grouping of donation scale of state-owned enterprises.To further verify the empirical results,this paper conducts robustness tests by quantile regression and counterfactual tests,and the results can still prove that the 2017 tax incentives reform has a positive incentive effect on donation behavior.Based on the analysis of the current situation of China’s charitable donations and corporate income tax preferential policies in Part II,as well as the theoretical and empirical investigations in Part III and Part IV,this paper puts forward reform proposals to improve the tax incentive policy for corporate donations in Part V.The discussion is carried out from three perspectives: reforming tax policies,regulating the collection and management procedures,and optimizing the social environment,which has important reference value and significance for promoting corporate donation,developing charity and realizing common prosperity.