Research Into The Tax Policy On Corporate Philanthropy Donations

With the continuous development of market economy, China's economy experienced sustained and rapid growth. However, the trend of a growing gap of income distribution aroused from this process does not get effective regulation by the secondary distribution even when the national tax revenue has surpassed the economic growth. As the third distribution, philanthropy donations can fill the vacancy between the first and secondary distribution and play an important role in reducing government's public expenditure pressure, reducing the gap between the rich and the poor and mitigating the social contradiction.In China, corporations are the principal part of philanthropy donations as well as a powerful driving force for charity. However, corporate philanthropy donations still developed insufficiently in China. Though the reason can be partly attributed to internal factor influence of relatively lacking of business responsibility, more importantly, the system defects of tax policies should account more for undersupply of corporate philanthropy donations. With regard to this, this thesis utilizes institutional economics and behavior economic theories to discuss the problems of the tax policies in terms of theoretical and empirical analysis. The problems include heavy corporate tax burden, lacking specialized tax laws for corporate philanthropy donations, insufficient motivation caused by the difference of tax supporting policies, faultiness of related systems such as inadequate propaganda of tax laws and difficulties with philanthropy remission procedures, etc. At last, after using the successful experience of other countries and regions as a source of reference, this thesis proposes that we should take the following measures:adjusting the tax policies and continuing to promote the structural corporate tax reduction; establishing regular philanthropy donation system with respect to tax legal system; incorporating direct donation into pre-tax deduction, explicitly stipulating the preference of physical labor and equity donation, making scientific standard of charitable organization, implementing pre-tax deferred deduction method of donation expenditure and refining the affirmation of tax-exempt qualification as regards tax motivation; promoting the propaganda of philanthropy donation tax policies, simplifying the tax rebating system and with regard to tax administration. We should allow the corporate philanthropy donations have precedence over tax in order to promote the system innovation of corporate philanthropy donation development and realize the social equality of tax policy.