Article 1: This Law is formulated for the purpose of encouraging donations and
standardizing the behaviors of both donation and receipt of donation; protecting
the legitimate rights and interests of the donor, the recipient and the
beneficiary; and promoting public welfare undertakings.
Article 2: This Law applies to any natural person, legal person, or other
organization that is willing to donate assets to any legally established social
bodies engaged in public welfare and to non?profit welfare administration units
for the use of public welfare undertakings.
Article 3: The public welfare undertakings stated in this Law refer to the
following non-profit activities:
1. Activities carried out by social bodies and individuals to provide disaster
relief, aid the poor, and give support and assistance to the physically
2. Educational, scientific, cultural, public health, and sports undertakings;
3. Construction of environmental protection facilities and public utilities in
4. Other public and welfare undertakings in society that aim to promote social
development and progress.
Article 4: Donations should be made on a voluntary and nonreimbursable basis.
Any forced apportion or any covert act of apportion will be prohibited, and no
one may engage in profitmaking activities of any kind under the guise of
Article 5: The use of donated assets ought to be based on the will of the
donor and remain in keeping with public welfare purposes. No one is allowed to
divert donated assets earmarked for public welfare to other uses.
Article 6: Donations should be made in observation of relevant laws, rules,
and regulations; and must not transgress social morality, or impair public
interests and other legitimate rights and interests of citizens.
Article 7: The donated assets received by social bodies engaged in public
welfare as well as the any value added to such donated assets are all public
assets of the society and are under the protection of relevant state laws. No
unit or individual is allowed to encroach upon, divert for other purposes, or
cause damage to donated assets.
Article 8: The State encourages the development of public welfare
undertakings, and extends support and preferential treatment to social bodies
engaged in public welfare and non?profit welfare administration units.
The state encourages natural persons, legal persons, or other organizations to
make donations to public welfare undertakings.
Those natural persons, legal persons, or other organizations that have made
outstanding contributions by making donations to public welfare undertakings
will be commended by the people's governments or relevant departments in charge.
The consent of the donor should first be sought before any public commendation
is extended to the donor.
Article 9: Natural persons, legal persons, or other organizations can choose
to make donations to the social bodies engaged in public welfare and non?profit
welfare administration units that fit their donation intentions. The assets they
donate should be the legitimate assets to which they have the right of disposal.
Article 10: Social bodies engaged in public welfare and non?profit welfare
administration units are allowed to receive donations in accordance with this
The social bodies engaged in public welfare stated in this Law refer to
legally established social bodies that aim to develop public welfare
The non-profit welfare administration units stated in this Law refer to
legally established educational organs, scientific research organs, medical and
public health organs, social and public cultural organs, social and public
sports organs, and social welfare organs that are engaged in public welfare
undertakings with no profit?making purposes.
Article 11: In the case of natural disasters or when the people's governments
and their departments at and above the county level are named by the donor
outside the country as the recipient, the people's governments and their
departments at and above the county level are allowed to receive the donation
and to exercise management over the donation in accordance with relevant
stipulations of this Law.
The people's governments and their departments at and above the county level
can either turn over the donated assets they have received to social bodies
engaged in public welfare and non-profit welfare administration units, or they
can distribute to or run public welfare undertakings according to the will of
the donor. However, they are not allowed to list themselves as the beneficiary
of the donation.
Article 12: The donor can enter into a donation agreement with the recipient
concerning the nature, quality, quantity, and uses of the donation. The donor
has the right to decide the quantity, the use, and the form of the donation.
The donor should fulfill the donation agreement according to the law, and turn
over the donated assets to the recipient in accordance with the time and the
form agreed in the donation agreement.
Article 13: If the donor is to donate assets to build a public welfare
project, the donor is required to reach a donation agreement with the recipient
on the capital, construction, management, and use of the project.
The recipient unit of the donated public welfare project should go through the
necessary examination and approval formalities concerning the project according
to relevant state stipulations, and will organize the construction of the
project. The construction of the project can also be organized through joint
efforts by both the donor and the recipient.
The quality of the project should meet state quality standards.
Upon the completion of the donated public welfare project, the recipient unit
should inform the donor of the construction progress, the use of construction
funds, and the results of a quality assessment of the project.
Article 14: The donor of a public welfare project can leave his or her name on
the project as a remembrance. In the case that a donor is a sole donor or a
principal donor of a public welfare project, the donor can suggest the name of
the project and submit the suggestion to the people's governments at and above
the county level for approval.
Article 15: The recipient of the assets donated by a donor outside the country
is responsible for handling the entry formalities for the donated assets
according to relevant state stipulations. As regards the donation of goods that
require a permit, the recipient should apply for the permit according to
relevant state stipulations, and the customs office should conduct examination,
clearance, and supervision upon receipt of the permit.
For donations made by overseas Chinese to localities inside the country, the
Departments of Overseas Chinese Affairs under the people's governments at and
above the county level should help the donor to go through necessary entry
formalities, and provide assistance for the donor with his donation of the
Chapter III: The Use And Management Of Donated Assets
Article 16: Upon receipt of donations, the recipient should issue a legal and
valid receipt to the donor. In addition, the recipient should also register and
put the donated assets on file, and take good care of the donated assets.
Article 17: Social bodies engaged in public welfare should use the donated
assets they have received to subsidize activities and undertakings that are in
keeping with their aims.
They should promptly put into use the donated assets that are earmarked for
As for funds, the amount of subsidies extended to public welfare undertakings
every year should not go lower than the proportions stipulated by the State.
Social bodies engaged in public welfare must strictly observe relevant State
stipulations, and take active steps to preserve and increase the value of
donated assets in line with the principles of lawfulness, safety, and
Non-profit welfare administration units should use the donated assets they
have received for promoting the public welfare undertakings under their
jurisdiction, and they are forbidden to divert the donated assets to other uses.
As for donated assets that are hard to keep in reserve or that will not bear
transportation, as well as donated assets that have exceeded actual demands, the
recipient can sell off the donated assets, and all the revenue acquired
therefrom should be used for the original purpose of the donation.
Article 18: In the cases wherein a donation agreement is established between
the recipient and the donor, the recipient should make use of the donated assets
as agreed in the agreement, and is forbidden to change arbitrarily the uses of
the donated assets.
If a change in the uses of the donated assets is necessary, the recipient
should seek the consent of the donor.
Article 19: The recipient of donated assets must set up a perfect financial
and accounting system, as well as a system for the uses of donated assets, in
accordance with relevant state stipulations, with a view to reinforcing its
management over the donated assets.
Article 20: The recipient is required to subject itself to supervision by
submitting a report to relevant government departments every fiscal year
concerning the use and management of the donated assets.
Relevant government departments can audit the accounts of the recipient when
The customs office will exercise supervision and control according to the law
over donated goods that enjoy tax exemptions or reductions.
The people's governments at and above the county level can participate in
supervision over the use and management of the assets donated by overseas
Chinese to localities inside the country.
Article 21: The donor has the right to inquire of the recipient about the use
and management of his or her donated assets, and put forward opinions and
suggestions concerning the use and management of the donated assets.
When so inquired, the recipient should respond truthfully.
Article 22: The recipient should subject itself to supervision by the society
by making known to the public its receipt of donations, as well as its use and
management of the donated assets.
Article 23: Social bodies engaged in public welfare should practice strict
economies, lower their management costs, and pay the salaries of their
functionaries as well as administrative expenses with such revenues as bank
interest according to relevant state stipulations.
Article 24: Companies and other enterprises that have donated assets to public
welfare undertakings according to the stipulations of this Law can enjoy
preferential treatment concerning enterprise income tax according to the
stipulations of relevant laws and administrative regulations.
Article 25: Natural persons as well as individual businesses that have donated
assets to public welfare undertakings according to the stipulations of this Law
can enjoy preferential treatment concerning personal income tax according to the
stipulations of relevant laws and administrative regulations.
Article 26: According to the stipulations of relevant laws and administrative
regulations, import tariffs and the value?added tax imposed on import links will
be reduced or exempted for goods donated by the donor from outside the country
to social bodies engaged in public welfare and non?profit welfare administration
units for the use of public welfare undertakings.
Article 27: Local people's governments should extend support and preferential
treatment to the public welfare projects donated to localities under their
Article 28: Any recipient that has arbitrarily changed the nature and uses of
donated assets without seeking the consent of the donor will be ordered to make
corrections and will be given warnings by relevant departments under the
people's governments at and above the county level.
If the recipient refuses to make corrections, then upon the consent of the
donor, the donated assets will be transferred by the people's governments at and
above the county level to the care of a public welfare social body or a
non-profit welfare administration unit that has the same or similar aims.
Article 29: Anyone who has diverted the use of, encroached upon, or embezzled
donated money and goods will be ordered by the people's governments at and above
the county level to return the money and goods he has used and acquired, and
will be penalized;
those who are found to be directly responsible will be dealt with by their
units according to relevant stipulations; and those who are found guilty of a
crime will be prosecuted for criminal liability according to the law.
The donated money and goods recovered from people mentioned in previous
articles should be used for the original purposes of the donation.
Article 30: In donation activities, anyone who is found to have committed one
of the following offenses will be punished according to the stipulations of
relevant laws and regulations; and anyone who is found guilty of a crime will be
prosecuted for criminal liability according to the law:
1. Evading foreign exchange controls and obtaining foreign exchange by fraud;
2. Evading taxes and defrauding the revenue service;
4. Selling, transferring, or diverting to other uses, any donated goods inside
the country that are imported with tax reductions and exemptions, without
obtaining the authorization of the customs office and without paying in full the
Article 31: Any functionaries in the recipient unit who have caused severe
damage to the donated assets as a result of their abuse of power and authority,
dereliction of duty, malpractice through favoritism and committing
irregularities will be dealt with by their units according to relevant
stipulations; and those who are found guilty of a crime will be prosecuted for
criminal liability according to the law.
Chapter VI Supplementary Provisions
Article 32: This law shall go into effect on September 1, 1999.