The tax law emphasizes that donations in kind should be regarded as sales of goods and donations. What does this mean?

To put it simply, "regarded as selling goods" emphasizes that donations in kind should be taxed according to law, and taxpayers should conduct accounting treatment according to law. "Donation" emphasizes that it meets the conditions stipulated in Article 9 of the Enterprise Income Tax Law of People's Republic of China (PRC) and can be deducted when calculating taxable income.

The specific provisions are as follows:

Article 25 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC) stipulates that enterprises that exchange non-monetary assets, donate, repay debts, sponsor, raise funds, advertise, sample, employee welfare or distribute profits with goods, property or services shall be regarded as selling goods, transferring property or providing services, unless otherwise stipulated by the finance and taxation department of the State Council.

Article 9 of the Enterprise Income Tax Law of People's Republic of China (PRC) stipulates that the public welfare donation expenses incurred by an enterprise within 12% of the total annual profit are allowed to be deducted when calculating the taxable income; The part exceeding the total annual profit 12% is allowed to be deducted when calculating the taxable income within three years after carry-over.