Since July, 20065438 1, donations made by individuals to rural compulsory education through non-profit social organizations and state organs are allowed to be fully deducted from pre-tax income when calculating and paying personal income tax. Donations provided by individuals to public welfare youth activity places (including new ones) through non-profit social organizations and state organs are allowed to be fully deducted from pre-tax income when calculating and paying personal income tax.
Individuals who use their income for education and other public welfare undertakings may deduct it from the taxable income in accordance with the relevant regulations of the State Council. However, the allowable deduction must meet the following conditions:
(1) must be a donation to public welfare undertakings such as education and natural disaster-stricken areas and poverty-stricken areas in China; (two) must be carried out through non-profit social organizations, state organs and other organizations in China, and shall not be directly donated;
(3) Unless otherwise specified, the donation amount shall not exceed 30% of the taxable income of individual income tax. In addition, personal donations (through non-profit social organizations and state organs) that meet the following donation methods can be fully deducted before paying personal income tax: donations to elderly activity institutions and educational undertakings; Donations to the Red Cross cause; Donations to public welfare youth activity places; Donations for public welfare and disaster relief were made to China Health Express Foundation, Sun Economic Science Foundation, china charity federation, China Legal Aid Foundation, China Courageous Foundation, Soong Ching Ling Foundation, china welfare institute, China Welfare Foundation for the Disabled, China Foundation for Poverty Alleviation, china coal miner pneumoconiosis treatment foundation and China Environmental Protection Foundation.
For example, Li, a citizen, earned 4,000 yuan in March 2005, directly donated 200 yuan to Xiaohong, an out-of-school child in a poor mountainous area in Sichuan, and donated 1 1,000 yuan to School P through the S District Education Bureau; In the same month, Li received 8,000 yuan in labor remuneration for giving lectures at Training Center A, and donated 2,000 yuan to China Red Cross Society. The salary deduction expense is 800 yuan, and the personal income tax payable by Li in that month is:
(1) Li directly donated 200 yuan, an out-of-school child, which will not be deducted before personal income tax is calculated. Donations to schools through the Education Bureau that do not exceed 30% of taxable income are allowed to be deducted. The taxable income of Li's salary this month =4000-800=3200 yuan, and the deductible donation limit of salary income =3200×30%=960 yuan. Personal income tax payable on monthly salary = (4000-800-960) ×15%-125 = 211yuan;
(2) Li's donation to the Red Cross can be deducted from the taxable income. Taxable income from labor remuneration =8000×( 1-20%)=6400 yuan. Personal income tax payable for labor remuneration in the current month =(6400-2000)×20%=880 yuan. Personal income tax payable by Li in the current month * * = 211+880 =1091yuan.
Tax exemption process for individual donations: According to the Law of People's Republic of China (PRC) on Tax Collection and Administration and its detailed rules for implementation, taxpayers who enjoy tax reduction or exemption shall submit a written application to the competent tax authorities, and attach relevant materials as required by the competent tax authorities. After examination and approval by the tax authorities, tax reduction and exemption can be enjoyed only after approval by the authorities authorized by laws and administrative regulations in accordance with the procedures for examination and approval of tax reduction and exemption. The process is also trivial: taxpayers who meet the conditions of tax reduction and exemption go to the jurisdiction branch to collect and fill in the application form for tax reduction and exemption correctly, submit a written application to the jurisdiction branch within the prescribed time limit, and provide relevant information as required by the tax authorities. Only after approval can you enjoy the tax reduction and exemption policy.