The Economic Observer reports on the newly implemented Enterprise Income Tax Law, which imposes exorbitant taxes on non-profit groups:
According to the Law, which took effect on January 1, 2008, non-profit organizations must pay a 25% tax on their operating income (income derived from investments), adding huge financial pressure to those domestic groups working on minjian or “civil society” issues in China. As the major backers for domestic charity work, public-interest foundations would be hardest hit by the new law.
Sources from the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) revealed that suggestions to abolish taxes on non-profit fund’s operational income would be made to the National People’s Congress and CPPCC in March. Meanwhile, sources close to the State Administration of Taxation said the issue was under study and related policies might be released in the future.
