Analysis Of The Impact Of My Country's Corporate Income Tax Preferential Policies On Corporate Donation Behavio

Since the reform and opening up of 1978,China’s economy and society have been steadily developing,the country’s overall strength has been steadily growing,and the people’s standard of living has been steadily rising.However,a development model that places too much emphasis on economic efficiency but ignores economic justice has led to an imbalance in the distribution of societal wealth,affecting the stability and justice of our society.The reasonable adjustment of the current distribution of income is one of the most exciting topics for the general public.In the context of the evolution towards shared prosperity,the third distribution is an important institutional mechanism that contributes to shared prosperity and a key to promoting the economic development and social development of China.This is an important measure,and donations are the main channel to realize the third distribution and play an important role in regulating excessive income and maintaining social stability.Corporations have always been the largest contributor to giving in China,and the government is constantly developing and improving tax incentives for corporate giving,thereby encouraging more businesses to become more involved in giving.In 2017,China adjusted its pre-tax deduction policy for corporate donations,clarifying that excess corporate donations can be deducted within three years of making the donation.So far,this policy adjustment has been in effect for more than 5 years.With the current wave of tax cuts looming,it’s time to use the 2017 reform to assess whether adjusting the pre-tax deduction policy for corporate donations may have an impact on the size of donations.The study is based on the 2017 corporate tax reform.This tax reform allows companies to deduct pre-tax contributions for 3 years after filing and could theoretically boost corporate donation incentives to some extent.Firstly,based on a generalization of the status quo of donation in China and a policy of preferential corporate taxation,this article analyzes the relevant theories of the policy of pre-tax deductible donation expenditure to encourage donations and proposes hypothesis 1:Adjustment of pre-tax withholding tax on profits from corporate donations will encourage companies to increase their donations and their willingness to give.At the same time,this article analyzes the heterogeneity of the dimensions of firm size,profitability and ownership,and proposes hypothesis 2: The adjustment of pre-tax deduction policies for corporate donations has a greater impact on large companies than on small ones.Hypothesis 3:The adjustment of the pre-tax deduction policy for personal income tax has a greater impact on low-margin companies than on high-margin companies.Hypothesis 4: The adjustment of the corporate donation deduction policy has a greater impact on non-public companies than on public companies.Secondly,this article uses public enterprises of A stock market from 2011 to2019 as a study sample to examine the impact of an adjustment in the pre-tax deduction policy for corporate donations on the magnitude of corporate donations.And to test the above hypotheses using a multiple linear regression model,the results show that adjusting the corporate donation deductibility policy will cause companies to increase the size of donations and increase the willingness to give.At the same time,through heterogeneity analysis,it was found that adjusting the pre-tax deduction policy for corporate donation income tax has different effects on firms of different sizes,profitability and ownership.Finally,this paper proposes five policy proposals that combine relevant literature and lessons from international experience: Firstly,increasing the corporate donation deduction rate and extend the deferral period;secondly,expanding the scope of recipients;thirdly,improving the pre-tax deduction system for non-monetary donations;fourthly,reinforcing the management of the tax incentive process for corporate donations;fifthly,guiding companies to assume appropriate social responsibility.The importance of this document is mainly as follows: First,it confirms the rationality of adjusting the Chinese government’s pre-tax deduction policy for corporate donations to encourage corporate donations,and also provides a theoretical basis for relevant departments to continue to promote the implementation of a tax concession policy;For different types of companies,the tax department can flexibly adjust the preferential tax policy and make the best of the situation according to local circumstances.