Public welfare donation refers to public welfare and relief donation (hereinafter referred to as public welfare donation), which refers to taxpayers' donations to education, civil affairs and other public welfare undertakings and areas suffering from natural disasters and poverty-stricken areas through non-profit social organizations and state organs in China. Charity donation is a noble act, and the national tax law encourages it through preferential policies. Therefore, many taxpayers take it for granted that charitable donations must be tax-free, and there is nothing to plan, but it is not.

Conditional restrictions on charitable donations:

Indeed, in order to encourage social charitable donations, the state has stipulated certain preferential clauses in the tax law, but the implementation of this clause has certain conditions. Only when these conditions are met can charitable donations be fully tax-free, otherwise they should be fully or partially taxed.

First of all, donations should go through specific institutions. According to the tax law, taxpayers who donate through social organizations and state organs in China can enjoy tax exemption, while those who donate by themselves cannot enjoy tax exemption. The social organizations mentioned here include China Youth Development Foundation, Hope Project Foundation, Soong Ching Ling Foundation, Disaster Reduction Committee, China Red Cross Society, China Disabled Persons' Federation, National Foundation for Ageing, Old District Promotion Association, and other non-profit public welfare organizations approved by civil affairs departments.

Secondly, donations must be targeted at specific targets, including: ① donations to the Red Cross. ② Donate to china green foundation. (three) donations to specific educational undertakings, such as donations to state-funded primary and secondary schools. (4) Donations to certain specific cultural undertakings, such as national key symphony orchestras, ballet companies, opera companies, Beijing opera companies, public libraries, museums, science and technology museums, art galleries, etc. ⑤ Donations to certain groups, such as the Executive Committee of the Chinese Cultural Renaissance Movement, the Foundation for Self-Strengthening and Saving the Country, the Association for Solidarity and Self-Strengthening, and the Securities Market Development Foundation. 6 donations for storms, fires, etc.

Third, there are certain restrictions on donations. The income tax law of foreign-invested enterprises and foreign enterprises stipulates that public welfare donations made by foreign-funded enterprises through specific institutions can be charged as current costs. Except for foreign-funded enterprises, taxpayers' public welfare donations through specific procedures are limited: ① According to the Individual Income Tax Law, the portion of public welfare donations made by individuals through specific institutions that does not exceed 30% of the taxable income declared by taxpayers can be deducted from their taxable income. ② According to the Enterprise Income Tax Law,12% is allowed to be deducted from the annual taxable income for public welfare donations made by domestic general enterprises; Donations to the Red Cross should be fully deducted when calculating and paying enterprise income tax; Donations to the greening foundation can be deducted before income tax in accordance with the proportion stipulated in the tax law;

It should also be noted that donations are exempt from income tax, and the tax law does not stipulate that these materials are exempt from value-added tax. According to Article 4, Paragraph 8 of the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax, "If assets, goods processed or purchased by the Commission are given to others free of charge, it will be regarded as selling goods." Charity donation belongs to the scope of "free gift to others" in the tax law, and value-added tax should be paid according to regulations.