“Practical” public welfare donation enterprises how to deduct before tax, one article done

2022-05-15 0 By

Many enterprises start the New Year by giving love.Dear financial friends, do you know the policies related to the pre-tax deduction of enterprise public welfare donation expenditure?How to determine the percentage of deduction?How to fill in the statement accurately?Interested friends, come to learn with xiaobian!General provisions: according to the law of the People’s Republic of China on enterprise income tax law implementation regulations “article 51 and article 52 and article 53, enterprise through the community public welfare organization or department (including county) people’s government at or above the county level and, for use in accordance with the laws and regulations of charity and public welfare donation spending, not more than 12% of the total annual profits, deducts.The portion exceeding 12% of the total annual profits shall be deducted in the calculation of taxable income within three years after being allowed to be carried forward.(The term “total annual profit” refers to the annual accounting profit calculated by an enterprise in accordance with the provisions of the unified state accounting system.)Donation of goods directly to the hospital in charge of the response to novel Coronavirus pneumonia outbreak.Article of policy: Donations by enterprises and individuals directly to hospitals engaged in COVID-19 prevention and control for novel coronavirus pneumonia outbreaks are allowed to be deducted in full amount in the calculation of taxable income.The implementation period is extended until March 31, 2021.Policy basis:Announcement of the State Administration of Taxation of the Ministry of Finance of the People’s Republic of China on Donation Tax Policies in Support of the Prevention and Control of Novel Coronavirus Pneumonia Epidemic (Announcement No. 9, 2020 of the State Administration of Taxation of the Ministry of Finance of the People’s Republic of China on The Continuation of Partial Preferential Tax Policies in Response to COVID-19Donation of cash and goods for the response to the novel Coronavirus outbreak through public welfare social organizations or state organs such as people’s governments at or above the county level and their departments.Article of Policy: Cash and goods donated by enterprises and individuals through public welfare social organizations or state organs such as people’s governments at or above the county level and their departments in response to the novel Coronavirus outbreak are allowed to be deducted in full amount in the calculation of taxable income.The implementation period is extended until March 31, 2021.Policy basis:Announcement of the State Administration of Taxation of the Ministry of Finance of the People’s Republic of China on Donation Tax Policies in Support of the Prevention and Control of Novel Coronavirus Pneumonia Epidemic (Announcement No. 9, 2020 of the State Administration of Taxation of the Ministry of Finance of the People’s Republic of China on The Continuation of Partial Preferential Tax Policies in Response to COVID-19Public welfare social organizations or people’s governments at or above the county level as well as their constituent departments and directly affiliated institutions shall be used for donations for poverty alleviation in targeted areas.1. From January 1, 2019 to December 31, 2022, donations made by enterprises through public welfare social organizations or people’s governments at and above the county level and their constituent departments and directly affiliated institutions for poverty alleviation in targeted areas are allowed to be deducted from taxable income of enterprise income tax according to actual conditions.The above-mentioned policies may continue to be applied to areas that have been lifted out of poverty during the period of policy implementation.The “targeted poverty alleviation areas” include 832 key counties in the national poverty alleviation and development work, contiguous counties in poverty-stricken areas (six counties and one city in Aksu Prefecture of Xinjiang enjoy the one-block policy), and registered poverty-stricken villages.2. When calculating the annual deduction limit of the expenditure for public welfare donations, the expenditure for poverty alleviation donations that meet the above conditions will not be counted.3. The above enterprise income tax policy can be applied to the part of poverty alleviation donation expenditures that have been incurred from January 1, 2015 to December 31, 2018 that meet the above conditions and have not been deducted in the calculation of taxable income of enterprise income tax.Policy basis: Announcement of The State Council Poverty Alleviation Office of the Taxation Administration of the Ministry of Finance on The Policy of Tax Deduction for Enterprise Poverty Alleviation Donations (Announcement No. 49, 2019 of The State Council Poverty Alleviation Office of the Taxation Administration of the Ministry of Finance)Expenditures on funds, goods and services made by enterprises, social organizations and organizations for sponsoring or donating the Beijing 2022 Winter Olympic and Paralympic Games and test events will be fully deducted when calculating the taxable income of enterprises.Policy basis: Notice of The General Administration of Customs of the Ministry of Finance on Taxation Policies for Beijing 2022 Winter Olympic and Paralympic Games (Finance and Taxation [2017] No. 60)Enterprises, social organizations and groups sponsoring and donating funds, materials and services for the Hangzhou Asian Games will be fully deducted when calculating the taxable income amount of enterprises.Policy basis: Announcement of The General Administration of Customs of the Ministry of Finance on Tax Policy of Hangzhou 2022 Asian Games and Asian Para Games (Announcement No. 18, 2020 of the Ministry of Finance) In practice, how to deduct the expenditure of public welfare donation according to the tax law?1. For donations made through the people’s governments at or above the county level and their departments, the recipient must be the people’s governments at or above the county level and their departments and directly affiliated institutions.If the recipient is a township level people’s government or sub-district office, it cannot be deducted before tax.2. Donations made through public welfare social organizations must be made in the year in which the corporate income tax is settled and paid, and the recipient is on the list jointly issued by the departments of finance, taxation and civil affairs.Otherwise, it cannot be deducted before tax.Social organisations engaged in public welfare should be eligible for pre-tax deductions for public welfare donations in accordance with the law.The list of qualified public welfare social organizations shall be jointly announced annually by the Ministry of Finance, the State Administration of Taxation and the Ministry of Civil Affairs, as well as the financial, taxation and civil affairs departments of provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning.For example, the list of pre-tax deduction eligibility for donations from Public welfare social organizations in Shanghai can be queried through: Home page of The State Administration of Taxation, Shanghai Taxation Bureau > Policy Documents > Policy and Regulations Database > Enterprise Income Tax column “Target Poverty Alleviation Areas” :It includes 832 key counties in the national poverty alleviation and development work, counties in contiguous poverty-stricken areas (six counties and one city in Aksu Prefecture of Xinjiang enjoy the policy of “one block”), and registered poverty-stricken villages.It can be found on the website of the National Rural Development Administration.1. It is not allowed to deduct the bills settled by administrative institutions before tax.2. As stipulated in Document no. 45 of Finance and Taxation (2010) (the policy will expire in full on January 1, 2020) :For spending on public welfare donations through public welfare social organizations, enterprises or individuals shall be provided at or above the provincial level (including the provincial financial department printed and sealed by the unit of donations of the public welfare donation notes or sealed by the unit of donations of the non-tax income generally payment receipt, can according to the provisions of pre-tax deduction.3. The latest policy provisions: According to the Announcement No. 27, 2020 of the Ministry of Finance, The Administration of Taxation and the Ministry of Civil Affairs:”11. When accepting donations, public welfare social organizations, people’s governments at or above the county level and their departments shall, according to the administrative levels, use the public welfare donation bills supervised (sealed) by the Ministry of Finance or the financial departments of provinces, autonomous regions and municipalities directly under the Central Government, and affix their own seals.Enterprises or individuals who make pre-tax deductions for eligible public welfare donations should keep relevant bills for future reference.”4. Note :(1) when accepting donations, state organs should use the public welfare donation bills supervised (printed) by the Ministry of Finance or the financial departments of provinces, autonomous regions and municipalities directly under the central government, and affix their own seals.– These notes are generally easy to obtain. The notes here are not invoices and are not affected by policies relating to invoices.(2) If the expenditure of public welfare donation is deducted before tax, relevant documents shall be kept for future reference.3. Direct donation shall adjust the direct donation expenditure incurred by the enterprise, and tax shall be adjusted and increased.For example, based on the orientation of government assistance and poverty alleviation, enterprises directly donate to poor villages, farmers, urban residents living in difficulty, rural primary schools and students in extreme poverty according to the poverty alleviation plan of the government and relevant departments.Although this kind of behavior has the public welfare, but does not accord with the tax law provisions of public welfare donation requirements.Four, false profits to recalculate the practice, the enterprise first according to their own annual “profit statement” pre-declaration of enterprise income tax, if the calculated profit is false, it is necessary to adjust the accounting statement.Enterprises should use the adjusted total profits to determine the pre-tax deduction limit for public welfare donations.5. The order of carry-over is very important What are the requirements on the order of deduction for the expenditure of public welfare donation carried forward from previous years and the expenditure of public welfare donation in the current year?When calculating and deducting the expenditure of public welfare donation, enterprises should first deduct the expenditure of donation carried forward from previous years, and then deduct the expenditure of donation in the current year.Policy basis: Notice of The State Administration of Taxation of the Ministry of Finance on Relevant Policies on The Pre-tax Carve-forward Deduction of Enterprise Income Tax for Public Welfare Donation Expenditure (Finance and Taxation [2018] No.15) The specific case is as follows: A company in China achieved a total accounting profit of 3 million yuan in 2021, and related expenditure of donation is as follows:1. The deduction amount of public welfare donation carried forward in 2020 is RMB 150,000;2. 100,000 yuan donated directly to a university;3. Donate 300,000 yuan through the City Red Cross;4. Donated 400,000 yuan to the target poverty alleviation areas through the Civil Affairs Bureau.In this example: 1. The pre-tax deduction limit of the enterprise’s public welfare donation in 2021 is 300×12%= 360,000 yuan. The deduction amount of the carried forward public welfare donation in 2020 is 150,000 yuan, which is less than the deduction limit in 2021.2. The donation of 100,000 YUAN directly to the recipient shall not be deducted before tax, and the taxable income shall be increased in full amount and filled in line 1 of A105070 “Donation Expenditure and Tax Adjustment Schedule”;3. By the zhuhai Red Cross society public welfare donations, deduct limitation to be 360000 yuan, 2021 advance after deducting the carried over the previous year’s $150000, surplus quotas for 15 = 36-210000 yuan, 300000 yuan for this year’s actual amount, you can deduct $210000, over the allowance of 90000 yuan can carry forward when calculating the taxable income amount deducted after three years,Fill in line 6 of A105070 Donation Expense and Tax Adjustment Schedule;4. The 400,000 yuan donated to the target poverty alleviation areas through the Civil Affairs Bureau can be fully deducted when the final settlement is made in 2021 and filled in line 8 of the Adjustment Schedule for Donation Expenditure and Tax Payment A105070.Finally, summarize column 7.As shown in the picture below: Source: China Tax News, Shanghai tax, by a product tax yue summary, reproduced please indicate the source!