1. Interest expenses incurred by non-financial enterprises in borrowing from financial enterprises, interest expenses incurred by financial enterprises in various deposits and inter-bank lending, and interest expenses incurred by enterprises in issuing bonds upon approval are allowed to be deducted before tax;
2. The interest expenses of non-financial enterprises borrowing from non-financial enterprises and the interest expenses paid to qualified unrelated natural persons are deducted, and the limit = loan principal * interest rate of similar loans of financial enterprises in the same period * borrowing time;
3. For the interest expenses paid to related parties, shareholders or other natural persons related to the enterprise, the pre-tax deduction standard is the loan amount whose asset-liability ratio does not exceed the proportion (2: 1 for other enterprises and 5:1for financial enterprises) * the interest rate of similar loans of financial enterprises in the same period * the borrowing time.
When calculating taxable income, the following expenses shall not be deducted:
1, dividends, bonuses and other equity investment income paid to investors;
2. Enterprise income tax;
3. Tax late fees;
4 fines, fines and losses of confiscated property;
6. Sponsorship expenditure;
7. Unapproved reserve expenditure;
8. Other expenses unrelated to income.
To sum up, the object of enterprise income tax is the income obtained by taxpayers. Including sales of goods, provision of services, transfer of property, dividends, interest, rent, royalties, donations and other income.
Legal basis:
Article 5 of the Enterprise Income Tax Law of People's Republic of China (PRC)
Taxable income is the total income of an enterprise in each tax year, after deducting non-taxable income, tax-free income, various deductions and losses allowed to make up in previous years.