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15 July 2015

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Circular on the Policies and Related Management Issues Concerning the Pre-tax Deduction of Public Welfare Relief Donations

The State agencies for accepting public welfare relief donations mean the people's governments at or above the county level and their departments.

 

A non-profit public welfare social organization or foundation that applies for the qualification for pre-tax deduction of donations shall satisfy the requirements as follows:

(1) It is devoted to providing services to the general public and does not focus on making profits;

(2) It qualifies as a public welfare legal person, and its property control and use are in line with all the laws and administrative regulations;

(3) The public welfare legal person possesses the total assets and their added value;

(4) Its earnings and operational surplus are mostly used for the activities conforming to the purposes of its creation;

(5) The remained estate can not be attributed to any individual or profit-making group when it is terminated or dissolved;

(6) It can not develop any business irrelevant to the public welfare purpose;

(7) It has sound financial and accounting systems;

(8) It has the organizational body that does not intend for making private profits;

(9) The donor is not allowed to participate by any means in the distribution of the assets of the non-profit organization, nor is the donor entitled to ownership to such assets.

 

A non-profit public welfare social organization or foundation that applies for qualification for pre-tax deduction of donations shall submit the following materials:

(10) A report concerning the application for the pre-tax deduction of donations;

(11) The registration approval document as issued by the civil affairs administrative department under the State Council or the provincial people's government;

(12) Its constitutional chapter, and the capital sources, use in recent years.

 

Those non-profit public welfare social organizations and foundations entitled to pre-tax deduction of donations, and the people's governments at or above the county level and their departments must use the public welfare relief donations that it has received for the purpose of education, civil affairs, and other public welfare businesses, or for the districts that suffer from natural disasters or the poverty-stricken districts as prescribed by tax laws or regulations.

 

Those non-profit public welfare social organizations and foundations entitled to pre-tax deduction of donations, and the people's governments at or above the county level and their departments shall use the vouchers of public welfare relief donations as uniformly printed under supervision of the central or provincial public finance department respectively subject to the financial affiliation when accepting donations or transferring donations, and attach their respective special financial seals; and shall issue receipts for any individual that requests it for his donations.

 

A taxpayer shall offer the following materials in addition when declaring the pre-tax deduction of public welfare relief donations:

(13) Certifications on the qualification for pre-tax deduction of donations of the non-profit public welfare social organization or foundation that has accepted or transferred donations;

(14) The vouchers or receipts of public welfare relief donations as issued by the non-profit public welfare social organization or foundation entitled to pre-tax deduction of donations and the people's governments at or above the county level or any of its departments;

(15) Other materials upon request from the competent taxation authority.

 

The competent taxation authority shall check the use of public welfare relief donations by non-profit public welfare social organizations or foundations, and if any violation of the constitutions of a non-profit public welfare social organization or foundation is found or any non-profit public welfare social organization or foundation uses any donations for any purpose other than those prescribed in its own constitutions, the income taxes on the earnings from donations and other kinds of earnings shall be levied, and the entitlement to pre-tax deduction of donations it has confirmed shall be revoked.