Tax Deductions for Art Gifts - China

Taxes in China

• The tax on an individual's income is progressive. An individual's income is taxed progressively at 5% - 45%.
• The corporate tax rate for domestic and foreign companies is 25%.
• Small companies pay 20% corporate tax in certain cases.
• Income from other business is taxable at 5% - 35%.
• Passive income such as interest and royalties is taxable at a standard rate of 20%.
• An individual's capital gains are taxable in China at the rate of 20%. Capital gains tax for a Chinese company is added to the regular tax.

 
Deductibility of Charitable Contributions
 
Personal Donations - A credit for donations given by an individual up to 30% of the income. Payers of Individual Income Tax can deduct up to 30 percent of their taxable income for public benefit contributions to NPOs [Regulations for the Implementation of the Individual Income Tax Law, Art. 24].
 
Business Donations - up to 12% of the income is deductible.  Payers of Enterprise Income Tax can deduct up to12 percent of their taxable income [Enterprise Income Tax Law, Art. 9]. According to the Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China, the term "public interest donations" as used in Article 9 of the EIT Law refers to donations made by an enterprise via "public interest social bodies" or the people's government on the county level or the instrumentalities thereof to the public interest undertakings as prescribed in the Public Welfare Donations Law.