Problem Caishui [2009] No.99 Notice on Pre-tax Deduction Policy for Loan Loss Reserves of Agricultural Enterprises and Small and Medium-sized Enterprises is inconsistent with Caishui [2009] No.64 Notice on Relevant Issues Concerning Pre-tax Deduction of Enterprise Income Tax for Loan Loss Reserves of Financial Enterprises? I understand that the pre-tax deduction of loan loss reserve is made for agriculture-related loans and SME loans according to document Caishui [2009] No.99, and the pre-tax deduction of loan loss reserve is made for the balance of loan assets at the end of the year after deducting agriculture-related loans and SME loans according to document Caishui [2009] No.64, right? Answer According to the Notice of the Ministry of Finance of State Taxation Administration of The People's Republic of China on the Pre-tax Deduction Policy for Agricultural Loans of Financial Enterprises and Loan Loss Reserves of Small and Medium-sized Enterprises (Caishui [2009] No.99), "1. Financial enterprises classify their agriculture-related loans and SME loans according to the Guiding Principles for Loan Risk Classification (Yinfa [20065438+0] No.465438+06), and make provision according to the following ratio. (2) Subprime loans, with a provision ratio of 25%; (3) For doubtful loans, the provision ratio is 50%; (4) Loss loans, with a provision ratio of 100%. " According to the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Relevant Issues Concerning Pre-tax Deduction of Enterprise Income Tax for Loan Loss Reserves of Financial Enterprises (Caishui [2009] No.64), "II. The calculation formula of loan loss reserves allowed to be deducted before tax in the current year is: loan loss reserves allowed to be deducted before tax in the current year = loan asset balance allowed to be withdrawn before tax at the end of this year × 1%- loan loss reserve balance deducted before tax at the end of last year". The accrual ratio here is 1%, which is the loss reserve for general loans and risky assets of financial enterprises, while for agricultural loans and loans for small and medium-sized enterprises, considering their risk degree, it is given. According to the above policy, your understanding is correct.