Core Viewpoint - Companies can deduct charitable donations from their taxable income under specific regulations, which incentivizes corporate philanthropy and supports public welfare initiatives [2][5]. Policy Regulations - According to the Corporate Income Tax Law and its implementation regulations, donations made by companies to qualified charitable organizations or government entities for public welfare activities can be deducted from taxable income up to 12% of the annual profit [2]. - Any portion of donations exceeding the 12% threshold can be carried forward and deducted within the next three years [2]. Determining Donation Amounts - The amount of charitable donations is confirmed based on the following principles: - For monetary donations, the actual amount received is recognized [4]. - For non-monetary donations, the fair value is used, and proof of fair value must be provided [4]. Eligibility for Tax Deduction - Not all donations qualify for tax deductions; only those made for legal charitable activities through recognized organizations are eligible [6][7]. - Donations must be made through qualified charitable organizations that are listed by the relevant government departments to ensure compliance and prevent tax evasion [7]. Example Calculation - For instance, if a company donates 1.5 million to establish a school and has an annual profit of 12 million, the deductible amount would be calculated as 12 million × 12% = 1.44 million, which is less than the donation amount, allowing for a deduction of 1.44 million [8].