Legal analysis: the penalty interest on loans literally means punitive interest. When a borrower signs a personal loan contract with a bank, the loan contract stipulates a penalty interest clause. Penalty interest is basically the interest of the month of one-time repayment, and it is not accounted for.

Legal basis: Article 10 of the Enterprise Income Tax Law The following expenses shall not be deducted when calculating taxable income:

(1) Dividends, bonuses and other equity investment income paid to investors;

(2) enterprise income tax;

(3) tax late fees;

(four) fines, fines and confiscation of property losses;

(5) Donation expenditures other than those specified in Article 9 of this Law;

(6) sponsorship expenditure;

(7) Unapproved reserve expenditure;

(eight) other expenses unrelated to income.