Can personal donation of masks be deducted from tax?
The answer is yes, the expenditure of charitable donations can be fully deducted from their taxable income. Let's see how the relevant policies are stipulated.
According to Article 2 of the Announcement of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Supporting the Tax Policy of Donation for Epidemic Prevention and Control in novel coronavirus (Announcement No.9 of State Taxation Administration of The People's Republic of China of the Ministry of Finance, 2020), enterprises and individuals directly donate items to hospitals undertaking the task of epidemic prevention and control, which are allowed to be deducted in full when calculating the taxable income.
Need to be reminded that the policy is limited to goods, excluding cash.
How to declare charitable donations after deducting individuals?
Individuals directly donate epidemic prevention supplies to hospitals that undertake epidemic prevention and control tasks, allowing full deduction when calculating taxable income. The donation acceptance letter issued by the hospital that the donor needs to obtain is used as the donation bill deducted before tax.
Relevant policies: Deduction regulations for other personal charitable donations
Paragraph 2 of Article 6 of the Individual Income Tax Law of People's Republic of China (PRC) stipulates that the part donated by individuals to education and other public welfare undertakings shall be deducted from the taxable income according to the relevant regulations of the State Council.
Article 24 of the Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China stipulates that the income donated by individuals to education and other public welfare undertakings mentioned in the second paragraph of Article 6 of the tax law refers to the income donated by individuals to education and other public welfare undertakings and areas and poverty-stricken areas that have suffered serious natural disasters through social organizations and state organs in China. If the donation amount does not exceed 30% of the taxable income declared by the taxpayer, it can be deducted from the taxable income.
In addition, according to Article 8 of the Notice of the Ministry of Finance and the Ministry of Civil Affairs of State Taxation Administration of The People's Republic of China on Relevant Issues Concerning Pre-tax Deduction of Public Welfare Donations (Caishui [2008] 160), when accepting donations, public welfare social organizations and people's governments at or above the county level and their constituent departments and directly affiliated institutions shall use the public welfare donation notes printed by the Ministry of Finance or the financial departments of provinces, autonomous regions and municipalities directly under the Central Government, and affix the personal donation notes, which shall be issued. After the newly established foundation applies for pre-tax deduction of donations, the donors of the original foundation can enjoy pre-tax deduction according to law with the donation bills.