Research on Tax Incentives for Charitable Donations of Non-Monetary Assets by Chinese Corporations

Corporate donations form a substantial part of social charitable donationsin China. Corporate non-monetary asset donations are important inthis regard as they bring goods and materials to areas where they aredesperately needed. However, the current scope and scale of corporatedonations are narrow due to a lack of tax incentives. This paper willexplain the incentive effects of the current tax regime by analysing howasset donations are treated by Chinese taxation laws, from the perspectiveof macroeconomic policies and market demands. It focuses particularlyon the relatively heavy tax burden and limited scope for tax exemptionson corporate asset donations in China. In light of this, we propose somepragmatic suggestions on incentivising policies that are more suitable forChina¡¯s current situation, such as increasing the exemptions before taxand allowing exemptions to roll over to future years, developing incentivepolicies on indirect and property taxes, and establishing the mechanismfor third-party price evaluation and equity donation regulation, etc