Recently, the Decision on Revising the Law of the People's Republic of China on Enterprise Income Tax (the "Decision") has been adopted at the 26th Session of the Standing Committee of the 12th National People's Congress and issued upon Order of President No.64 for implementation as of the date of promulgation.
The Decision makes it clear that Article 9 of the Law of the People's Republic of China on Enterprise Income Tax is revised to read "in relation to public welfare donation payments made by an enterprise, the portion within 12% of the total annual profit may be deducted from taxable income, while the portion in excess of 12% of the total annual profit is allowed to be carried forward to the following three years and be deducted for taxable income purpose." Since the provision of the Charity Law of the People's Republic of China which states that charitable donation payments could be carried forward to the next three years has become legally effective from September 1, 2016, this Decision does not affect its validity. As for any charitable donation payment by an enterprise after September 1, 2016 and before the implementation of this Decision for revisions, the preferential policy of carrying forward relevant donation payments to the next three years for deduction purpose shall also apply.