REGULATIONS FOR RECOGNITION OF PROFIT-SEEKING ENTERPRISES' DONATIONS IN THE FORM OF CULTURAL AND CREATIVE PRODUCTS/SERVICES AS EXPENSES

11/01/2010

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In response to Article 26 of the Act for Promoting Cultural and Creative Industries which allows enterprises to recognize their donations in the form of cultural and creative products/services as expenses or losses, the Ministry of Finance, together with some other agencies, introduced the Regulations for Recognition of Profit-Seeking Enterprises' Donations in the Form of Cultural and Creative Products/Services as Expenses or Losses (the Regulations") on 7 September 2010. Below are some of the major regulations:
l	The donations made by profit-seeking enterprises to students or disadvantaged groups in the form of original products or services purchased from local cultural or creative businesses shall be deemed donations under the law only if they are provided to such students or disadvantaged groups through schools, institutions or groups.
l	The cultural and creative activities sponsored by profit-seeking enterprises must be held in remote areas and must be non-profit and open to the public.
l	Incubation centers formed with donations from profit-seeking enterprises must meet relevant rules regarding the number of staff, area, facilities and equipment. Besides, they must keep separate account books for donations given for specific purposes and cultural and creative businesses must have commenced operations there.
l	Within one month of the end of the accounting year in which donations were made, profit-seeking enterprises must file an application together with supporting documents with the central competent authorities for a certificate of donation. When filing an income tax return, profit-seeking enterprises that have made donations must attach the certificates of donation, and relevant receipts and information.
l	Schools, institutions, groups or cultural and creative businesses transferring donations [to students or disadvantaged groups] or accepting donations [for conducting cultural and creative activities or forming incubation centers] under the Regulations must, within 30 days of the donation transfer, cultural and creative activities or incubation center formation, publish the name(s) of recipient(s) of such donations, amount of donations, date of transfer, donated items and other relevant information on their websites or announce such information through appropriate methods.