ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

A study of donation system and taxation support plans for encouraging donation culture

  • Su Sung Kim Korea Teachers Pension

Asian Tax Journal Vol. 16 No. 4 (2015), pp. 63-93

Abstract

The methods of nation support for neglected class of people are that the direct support method by national budget and the indirect support method which support the neglected class of people by supporting the nonprofit organization etc. instead of government. The latter method was made by mainly donation. By the way, we verified that there was the fault regarding encouraging donation culture when we consider the current taxation system and it is necessary for legislative supports about various donation systems to encourage donation culture through all society. Therefore we expect that the effective methods are the institutional support and the taxation support for the purpose of encouraging donation culture. This study researched the institutional support plan and the taxation problem regarding current donation system, through these, we examined the taxation support plan for encouraging donation culture. Not only the institutional support, but also the taxation support plan was very important for encouraging donation culture. In the pursuit of this purpose, the various legal supports are necessary such as donation pension system, pension donation system and service donation system, stock donation, inheritance donation system etc. and the complete taxation support is necessary in case of actual donation. The insistent support plans in this study are as follows. First, the donation culture should be encouraged by various donation system and the taxation support plans should be necessary which were correspond to each donation system. Second, currently according to donation income tax deduction was changed to tax credit, the donation culture would be hindered. So, the change to income tax deduction or the expansion of tax credit rate would be necessary. Third, the donation which was expensed in relevant year should be fully deducted in current business year by expansion of taxation support for donation deduction carried forward. Finally, the transparency for donation organization should be secured and the reliability for donation organization should be recovered by management reinforcement for nonprofit organization and it is need to reinforce the rules of punishment for issuing the donation statement of institution or individual falsely for the purpose of prevention of false donation deduction fundamentally. This study found the actual plans that extend the donation culture and encourage the social contribution according to donation by related legislation support and taxation support for encouraging donation culture. We wish that the voluntary donation culture would be spread and the support for neglected class of people would be extended by this study. This study has the significance in that this study found actual and effective plan for positive taxation support of donation.

Keywords

  • Encouraging donation culture
  • donation
  • Donation income tax deduction and tax credit
  • Donation taxation

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Asian Tax Journal

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Editor-in-Chief : Prof. Wanyong Kim Editorial Office : Dept. of Finance, Accounting & Taxation, Hanyang Cyber University, 220 Wangsimni-ro, Seongdong-gu, Seoul, Republic of Korea Tel : +82-2-2290-0418 / +82-10-8664-1117 E-mail : taxresearch2@hanmail.net