How corporate donations are tax deductible

One: large corporate donation expenditures are directly offset against taxes (all wrong)

For example, a company with a profit of 10 million a year, according to the 25% corporate income tax rate, need to pay 2.5 million in taxes. If you donate 1 million to a charitable organization, is it that you only pay 1.5 million, anyway, you look at your money, no matter whether it is a tax or a donation, is to end up out of the donation can also get a good reputation!

In fact, it can not be so simple to calculate, according to the "Ministry of Finance, General Administration of Taxation, Ministry of Civil Affairs on public welfare donations pre-tax deduction of matters related to the announcement" relevant provisions of the law in line with the public welfare of charitable donations to the public welfare expenditures permitted under the provisions of the tax law in the calculation of taxable income deductions, that is, donations are not directly deductible to pay the tax.

For example: the profits of the enterprise is 10 million, even if now donated 1 million, then according to the 9 million as the basis, the remaining 9 million multiplied by 25% is equal to 2.25 million, so if the star, the enterprise in order to offset the tax to donate, donate 1 million to offset the 25 million tax, this makes sense?

Second: donations against tax for small and micro enterprises more effective (probably correct but not comprehensive)

In early April this year, the Ministry of Finance and the State Administration of Taxation on the implementation of small and micro enterprises and individual businessmen preferential policies on income tax announcement put forward on the small and micro-enterprises, annual taxable income of up to 1 million part of the tax in the fiscal tax in 2019 on the basis of the preferential policies of the 13th document, and then halved the enterprise income tax. income tax.

If you are a small microenterprise, if your company's profit is 3.1 million, and if you follow the 25% enterprise income tax rate, then you need to pay 3.1 million multiplied by 25%, which is 775,000 yuan. However, if you donate 200,000, the profit becomes 2.9 million, at this time you only need to pay 2.5% of 1 million, that is 25,000. 10% of 1.9 million, that is 190,000, the total **** is 215,000, and add the donation expenditure of 200,000, the total **** is 415,000. This shows that compared to the 3.1 million 775,000, companies can still "save" a lot of money.

Public donation notes

(If the enterprise really do public welfare, the relevant tax knowledge points or to understand Oh ~)

1, find the right donation channel

enterprises and individuals if the public welfare organizations to donate, pay attention to the public welfare organizations whether the donation pre-tax deduction qualification.

According to the provisions of the public welfare organizations of the public welfare donation pre-tax deduction qualification is valid nationwide, valid for three years. Taxpayers in the donation, pay attention to determine the public welfare social organizations of the pre-tax deduction qualification in the validity of the period.

2, get the donation note

enterprises or individuals to foreign donations, to get the donation note in a timely manner. In accordance with the provisions of the donor should be with the Ministry of Finance or provinces, autonomous regions and municipalities directly under the Central Finance Department supervision (printing) of the public welfare donation bills for pre-tax deduction. Individuals occurring public welfare donations, can not get donation bills in a timely manner, can be temporarily based on public welfare donations of bank payment vouchers, pre-tax deduction, and to the withholding agent to provide public welfare donations of bank payment vouchers copy. Individuals should provide additional donation bills to the withholding agent within 90 days from the date of donation. If the donation bills are not provided in accordance with the regulations, the withholding agent shall report to the competent tax authorities within 30 days. Organs, enterprises and institutions unified organization employees to carry out public welfare donations, taxpayers can be summarized with the issuance of donation bills and employee detail list, the corresponding deduction.

3, calculate the amount of deduction

In order to support the development of public welfare, the relevant departments of the state introduced a series of public welfare donation expenditure pre-tax deduction policy. According to the range of deductions, pre-tax deductions are differentiated into "limit deductions" and "full deductions". Taxpayers are required to calculate the amount of pre-tax deduction accurately.

"Limit deduction" provisions are:

Enterprises through public welfare organizations or the people's government and its departments and agencies above the county level (including the county level), for charitable activities, public welfare undertakings of the donation expenditure, can be in the annual profit within 12% of the total part of the enterprise income tax deduction; more than the part of the enterprise income tax deduction, the enterprise income tax deduction within three years. The portion exceeding 12% of the total annual profit shall be allowed to be carried forward within three years. Individuals through the public welfare organizations in China, state organs to education, poverty alleviation, relief and other public welfare and charitable causes of donations, donations do not exceed the taxpayer declared taxable income of 30% of the portion of the taxpayer's taxable income can be deducted from their taxable income before tax.

The provisions of "full deduction" are mainly:

From January 1, 2020 to March 31, 2021, enterprises or individuals through public welfare social organizations or people's governments and their departments at or above the county level and other state organs, donations of cash and goods used to deal with the new coronavirus-infected pneumonia epidemic can be deducted in full before income tax. full amount before income tax.From January 1, 2019 to December 31, 2025, poverty alleviation donation expenditures made by enterprises through public welfare social organizations or people's governments at or above the county level (including the county level) and their constituent departments and directly subordinate organs for use in targeted poverty alleviation areas may be deducted before enterprise income tax according to the actual amount. Expenditures on funds, materials and services of enterprises, social organizations and groups for sponsoring and donating to the Beijing 2022 Winter Olympic Games, Winter Paralympic Games and test events can be fully deducted before enterprise income tax. Expenditures on funds and materials donated by individuals for the Beijing 2022 Winter Olympics, Winter Paralympics, and test events can be fully deducted when calculating the taxable income of individuals.

Policy Basis

Announcement of the Ministry of Finance and the State Administration of Taxation on Matters Relating to Pre-tax Deduction of Public Welfare Donations through Public Welfare Mass Organizations (Announcement of the Ministry of Finance and the State Administration of Taxation No. 20 of 2021)

Announcement of the Ministry of Finance and the State Administration of Taxation on the Individual Income Tax Policy on Donations for Public Welfare and Charitable Causes (Announcement of the Ministry of Finance and the State Administration of Taxation No. 99 of 2019)