What Is Endowment Asset Allocation?

Donated assets refer to the sum of donations (allocations) of assets by natural persons, legal persons, or other organizations to administrative institutions at all levels, including large-scale machinery and equipment, vehicles, instruments, and various assets that should be included in the unit's fixed asset management measures in accordance with regulations. Corporate donation of assets is a common form of donation.

Donate assets

Right!

Donated assets refer to the sum of donations (allocations) of assets by natural persons, legal persons, or other organizations to administrative institutions at all levels, including large-scale machinery and equipment, vehicles, instruments, and various assets that should be included in the unit's fixed asset management measures in accordance with regulations. Corporate donation of assets is a common form of donation.

Chinese name

Donate assets

Meaning

Donations to administrative institutions at all levels (

Often seen

Corporate donation assets

Types of

Donate

Regarding foreign donated assets, the provisions of the "Enterprise Accounting System" and "Enterprise Accounting Standards" are consistent. ^[1]

With regard to corporate income tax, Article 25 of the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China" first stipulates that sales donations, including donations of assets, are treated as sales, that is, companies that use goods, property, and labor services for donations , It shall be deemed to be the sale of goods, the transfer of property or the provision of labor services, except as otherwise provided by the competent department of finance and taxation of the State Council. ^[1]

On the other hand, the Notice of the State Administration of Taxation on the Handling of Enterprise Income Taxes on Assets Disposal (Guo Shui Han [2008] No. 828) is based on the provisions of Article 25 above, in addition to reiterating that the use of assets by companies for external donations must be treated as sales. In addition, there are supplementary provisions on the measurement of donated assets. According to its regulations, if the assets donated by an enterprise are self-made assets, the sales revenue shall be determined based on the external sales price of similar assets of the enterprise over the same period; the sales revenue may be determined based on the price at the time of purchase for assets that are purchased externally.

Articles 9 and 10 of the "People's Republic of China Enterprise Income Tax Law" make restrictive provisions on the deduction standards and percentages of donations, including asset donations, that is, the public welfare donation expenses incurred by an enterprise shall be 12% of the total annual profit. The part within that allowance is allowed to be deducted when calculating the taxable income. Pre-tax deductions are not allowed for non-public welfare donations and public welfare donations exceeding the above standards. As for the scope of charitable donations, Article 51 of the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China" explains: "Public charitable donations referred to in Article 9 of the Corporate Income Tax Law refer to enterprises through charitable social organizations or county-level The above people's governments and their departments are used for donations of public welfare under the "People's Republic of China's Public Welfare Donation Law." As for the meaning of "total annual profit", Article 53 of the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China" It was clarified: "The total annual profit refers to the annual accounting profit calculated by the enterprise in accordance with the provisions of the unified national accounting system."

In addition, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Civil Affairs also jointly issued the Notice on Issues Related to Pre-tax Deduction of Public Welfare Donations (Caishui [2008] No. 160). Refinement regulations such as content, according to its provisions, which are used for public welfare donation, "refers to the donation expenditure to public welfare under the" People's Republic of China Public Welfare Donation Law ", the specific scope includes: (1) disaster relief , Relief of poverty, assistance to the disabled and other difficult social groups and individuals; (2) education, science, culture, health, sports; (3) environmental protection, construction of public facilities; (4) promotion of social development and progress Other social public and welfare undertakings. "The non-profit donation allowable before tax deduction must be implemented" through non-profit social organizations or people's governments at or above the county level and their departments. "

The value of donated assets when accepting donations from non-profit social organizations and people's governments at or above the county level and their constituent departments and direct agencies shall be confirmed in accordance with the following principles: (1) Monetary assets accepted shall be calculated based on the actual amount received. (2) Non-monetary assets that accept donations shall be calculated at their fair value. When donating to a non-profit social group and the people's government at or above the county level and its constituent departments and direct agencies, the donor shall provide proof indicating the fair value of the donated non-monetary assets. If the above-mentioned certificate cannot be provided, the non-profit social group and county People's governments at or above the level, their constituent departments, and directly-affiliated institutions may not issue charitable donation notes to them. Caishui [2008] No. 160 also specifically emphasizes: "When accepting donations, non-profit social organizations and people's governments at or above the county level, as well as their constituent departments and direct agencies, should be used by the Ministry of Finance or provinces, autonomous regions, and municipalities according to the administrative level. The charitable donation notes printed by the financial department and stamped with the seal of the unit; individuals who request donation notes should be issued. "