Establishing Tax Incentives Of Non-profit Organization

The booming development of Non-profit Organizations is an expression of social vitality, multi-element and openness. Non-profit Organizations in developed countries have become an important part of society and play an important role in education, health and environmental protection.In China, the researches on legal systems of non-profit organizations began in the 1980 s, and nowadays those organizations have gradually merged into our lives. Meanwhile, the researches on tax incentives of non-profit organizations have been carried out in full swing. Along with the advancement of social transformation and market reform, it’s valuable to probe into tax incentives of non-profit organizations from the perspectives of market competition.This paper is divided into five parts to probe ways to establish tax incentives of non-profit organizations under the competitive neutrality perspectives.The first part is introduction, including the key argument, research value and significance, literature review, main research methods, as well as the innovation and inadequate of the research.The second part is summary of non-profit organizations, including the clarifying of concept, characteristics of non-profit organizations, and comparative analyzing of their classifications and functions. Those are the foundation of tax incentives legal system reconstruction.The third part is the application of competitive neutrality policy. The concept, development and application requirements of competitive neutrality are discussed in this part. It’s very necessary to precisely clarify competitive neutrality policy when researches about tax incentives on non-profit organizations are still few.The fourth part discusses the deficiencies of tax incentives on non-profit organizations status quo in China. Specifically, this part contains the theoretical basis of tax incentive on NPOs, comprehensive development overview of Chinese non-profit organizations and relative tax systems. Based on this, the problems existing in the tax system of non-profit organizations in China, stem from the lack of a complete set of specifications. The unfair competitions of general enterprises will be produced by the non-taxed commercial activities on non-profit organizations.The fifth part are suggestions on the reconstruction of tax incentives on non-profit organizations from competitive neutrality perspectives. Using the practices in United States, Germany and Japan as references, realizing the reconstruction of tax incentives on non-profit organizations in China needs to clarify non-profit and commercial activities of non-profit organizations, set the scope of the non-profit organizations’ commercial activities, give different preferential tax policies to different commercial activities, strengthen the supervision of non-profit organizations’ information disclosure system, and conduct difference tax treatment to different types of non-profit organizations.