How to pay tax on charitable donations exceeding 12%.

Donations do not need to be taxed, but for corporate charity donations, according to the provisions of the Corporate Income Tax Law, when the corporate income tax is settled and settled, only the portion within 12% of the total annual profit is allowed to be paid. It is deducted when calculating taxable income, and the excess cannot be used as a deduction for corporate income tax.

Suppose your accounting profit for the year is 1 million, of which 150,000 is a charity donation. In this way, According to regulations, only 100*12% = 120,000 can be deducted before corporate income tax. The extra 30,000 will have to be adjusted to the taxable income based on the total profit

That is, the taxable income will be It’s: 103=1.03 million, corporate income tax payable is 103*25%