Corporate Donations to Mainland China Require Approval Before Being Deductible as Expenses.
The Taichung Branch of the National Taxation Bureau of the Central Area, Ministry of Finance, stated that, in accordance with Article 79 of the Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax, donations made by profit-seeking enterprises to Mainland China must be approved by the Mainland Affairs Council. Furthermore, such donations must be carried out through organizations or institutions that comply with Paragraph 4, Article 11 of the Income Tax Act, and proper receipts issued by these organizations must be obtained before the donations can be recognized as deductible expenses or losses for the year.
The Taichung Branch explained that, in light of recent floods in certain areas of Mainland China, enterprises intending to make donations should note that such donations must first be reviewed and approved by the Mainland Affairs Council in accordance with the Income Tax Act and related regulations. Donations must be made through qualified organizations or institutions. Donations made without approval, or directly to Mainland entities, cannot be listed as deductible expenses or losses.
The National Taxation Bureau reminds profit-seeking enterprises that, when filing their income tax returns, any donations to Mainland China must comply with the relevant laws and regulations to avoid adjustments and supplementary tax payments.
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Contact person: Profit-seeking Enterprise Income Tax and Estate Gift Tax Section, Mr.Chen
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Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=7561b30f0e48488fbfb433fe5b21a0ad