Enterprises or individuals qualified for pre-tax deduction of public welfare donations or the people's governments at or above the county level and their constituent departments and directly affiliated institutions may deduct the income tax on the donation expenses of public welfare undertakings in accordance with the regulations. Donation means giving something of value to others without asking. When providing donations, non-profit organizations should recognize them as expenses during the period of providing donations or making unconditional donation commitments, and at the same time reduce assets or increase liabilities. Specific treatment mainly depends on the form of welfare.
Donation process:
1. The Foundation has established contact with the donors, and the two sides conducted preliminary communication and consultation on the contents, recipients and purposes of the donation, and reached a donation understanding.
2. The Foundation shall, according to the wishes of the donors, formulate donation letters or agreements, and draft management measures or implementation rules;
3. Representatives of both parties shall sign a donation book or donation agreement (in quadruplicate) and hold a donation ceremony when necessary;
4. The donor implements the donation according to the agreement. Upon receipt, the Foundation will publicize it in official website in time, and issue donation bills and certificates. Donation of funds: after the funds are received, special bills for donation will be issued according to the currency and actual amount of donated funds. Donation in kind: After the donation arrives at the Foundation, the Foundation will issue a special donation invoice based on the goods invoice provided by the donor; If the donor is unable to issue an invoice for the goods, the Foundation will evaluate the value of the donation through an evaluation agency, and the donation that does not need to be evaluated will be evaluated by the Foundation itself at a fair price, and a professional bill will be issued to the donor according to the evaluation amount. Other donations, such as stocks, bonds, securities, etc. , shall be implemented in accordance with the relevant provisions of the state;
5, the foundation according to the classification management of special donations, the establishment of financial accounts, earmarking;
6. The Foundation regularly inspects and supervises the use of donated funds and the progress of the project, provides timely feedback information to the donors, and announces the implementation of the project on the website or other media.
To sum up, enterprises and individuals who donate through non-profit organizations should pay attention to whether non-profit organizations are eligible for pre-tax deduction of donations. Expenses donated by enterprises and individuals through social organizations that have not obtained the pre-tax deduction qualification for public welfare donations shall not be deducted from enterprise income tax and personal income tax unless there are special provisions. The pre-tax deduction qualification of public welfare donations of public welfare social organizations is valid for three years nationwide. When making donations, taxpayers should pay attention to judging whether the pre-tax deduction qualification of public welfare social organizations is within the validity period.
Legal basis:
Article 1 of the Supplementary Notice on Issues Related to Pre-tax Deduction of Public Welfare Donations
Enterprises or individuals qualified for pre-tax deduction of public welfare donations or the people's governments at or above the county level and their constituent departments and directly affiliated institutions may deduct the income tax on the donation expenses of public welfare undertakings in accordance with the regulations.
Article 5
Enterprises or individuals who spend public welfare donations through public welfare social organizations should provide public welfare donation bills printed by the financial departments at or above the provincial level and stamped with the seal of the donor, or receipts for general contributions of non-tax income stamped with the seal of the donor, before pre-tax deduction can be made in accordance with the regulations.