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China cuts taxes to support quake relief
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The State Tax Administration said it cut taxes and offered refunds in a move to support earthquake-devastated regions in Sichuan Province.

Losses due to the earthquake, for both companies and individuals, can be deducted from tax returns, the State Taxation Administration said in a notice on its Website.

Supplies donated by other countries, individuals and companies will be exempt from import tax, the administration said.

People who paid tax on cars or ships that were destroyed in the quake can apply for a tax refund until the end of this year.

Quake victims can also apply for a reduction or exemption from land use taxes.

A deed tax on the purchase of a new home will also be cut or waved for earthquake victims. Detailed rules will be regulated by provincial governments in the quake-hit areas.

The administration also reminded companies and individuals that charitable donations to earthquake-stricken areas will be tax free depending on the amount.

Companies can donate up to 12 percent of its yearly profit without paying tax, according to corporate income tax law. For individuals, donations up to 30 percent of their annual income will be exempt from tax. The donation must be made through domestic social entities or government bodies. Individual donations made directly to victims are still taxable.

"When we donate, we did it while thinking about the victims, not whether the money is tax-free or not," said Edward Hu, from FESCO in Shanghai.

Companies on the Chinese mainland have donated a combined 4.1 billion yuan (US$587 million) in cash and goods to quake victims as of yesterday afternoon, according to Sina.com.

(Shanghai Daily May 20, 2008)

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