The State Taxation Administration ("STA") has recently issued the Guidelines for Preferential Tax Policies in Support of the Fight Against Poverty (the "Guidelines").
The Guidelines list a total of 110 currently-effective preferential tax policies for poverty alleviation in six aspects, including supporting the construction of infrastructure in poverty-stricken areas, fostering the development of agriculture-related industries, vitalizing entrepreneurship and employment in poverty-stricken areas, promoting the development of inclusive finance, facilitating the faster development of "former revolutionary bases, ethnic minority autonomous regions, border areas and undeveloped regions", and motivating social forces to increase donations in support of poverty alleviation. Further, the Guidelines state that a wide range of methods, including tax exemption, reduction of taxable income, pre-tax deduction of reserves, and simplified tax calculation, are used to motivate financial institutions, insurance companies, guarantee companies, and small-amount loan companies to offer stronger financial support for development-oriented poverty relief, to farming households and small and micro firms as the key targets. Moreover, the Guidelines expressly state that overseas donators will be exempt from import value-added tax on their charitable donations; the public-benefit donations offered by enterprises through commonweal social organizations or government agencies may be deducted from their taxable income for the enterprise income tax purpose; and eligible donations made by enterprises for poverty relief may be deducted before the calculation of payable enterprise income tax, to the extent of their actual values.