1, VAT cannot be deducted. The interest earned by the loan belongs to the loan service, and the input tax amount earned by the interest shall not be deducted from the output tax amount.

Loan services, with the total interest and interest-based income obtained from providing loan services as sales. The input tax of the following items shall not be deducted from the output tax: (6) purchased passenger services, loan services, catering services, residents' daily services and entertainment services.

Basis: Notice of the Ministry of Finance of State Taxation Administration of The People's Republic of China on Comprehensively Promoting the Pilot Project of Changing Business Tax to Value-added Tax (Caishui [2065438+06] No.36).

2. Enterprise income tax can be deducted before tax. The expenses incurred by an enterprise within the territory of China belong to the VAT taxable items, and if the other party is a VAT taxpayer who has gone through tax registration, the invoice shall be used as the pre-tax deduction voucher.

Basis: Administrative Measures for Pre-tax Deduction Vouchers of Enterprise Income Tax