"Regulations for the Implementation of the Enterprise Income Tax Law" Article 38 The following interest expenses incurred by an enterprise in its production and business activities are allowed to be deducted:
(1) Interest expenses incurred by non-financial enterprises in borrowing from financial enterprises, interest expenses incurred by various deposits and interbank lending of financial enterprises, and interest expenses incurred by enterprises in issuing bonds upon approval;
(two) the interest expenses of non-financial enterprises borrowing from non-financial enterprises shall not exceed the amount calculated according to the interest rate of similar loans of financial enterprises in the same period.
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 Tax Policy Issues Concerning Pre-tax Deduction Standards for Interest Expenses of Related Parties of Enterprises (Caishui [2008] No.65438 +02 1), when taxpayers obtain loans from related parties, the ratio of debt investment to equity investment should meet the tax requirements (Note: the highest ratio of debt to capital of financial enterprises is 5: 1, The highest debt-to-capital ratio of other enterprises is 2: 1). In principle, loan interest expenses between related parties that exceed the above debt-to-capital ratio shall not be deducted before tax, except as stipulated in Article 2 of Caishui [2008] 12 1.
The Notice of State Taxation Administration of The People's Republic of China on Printing and Distributing (Guo Shui Fa [2009] No.2) further stipulates the deduction of loan interest expenses of affiliated enterprises. Interest expense shall not be deducted = interest of all related parties actually paid in the current year ×( 1- standard ratio ÷ related debt-capital ratio).
According to the Notice of the Ministry of Finance on Doing a Good Job in the Annual Report of Enterprises under the implementation of accounting Standards in 2008 (Cai [2008] No.60), donations and debt exemptions accepted by enterprises that meet the recognition conditions of accounting standards should usually be recognized as current income. If you accept the direct or indirect donation from the controlling shareholder or the subsidiary of the controlling shareholder, judging from the economic essence, the capital investment of the controlling shareholder in the enterprise should be regarded as equity, and the relevant profits should be included in the owner's equity (capital reserve).