Personal and corporate borrowings are taxed.

When an enterprise pays loan interest to an individual, it must withhold and pay personal income tax at a tax rate of 20% of the interest income. When an enterprise calculates financial expenses, it will include the interest paid in "financial expenses - interest expenses". This part of the interest expenses does not need to pay business tax, urban construction tax, education surcharge and local education surcharge. When signing a loan contract, the enterprise needs to pay stamp tax based on 0.05‰ of the contract amount. Personal income tax applies to many types of income.

Tax treatment of personal and corporate borrowings:

1. Tax treatment of loan interest: The interest paid by the borrower may need to pay interest tax, and the party collecting the interest needs to pay the interest Income is included in taxable income;

2. Stamp duty on loan contracts: According to relevant tax laws, stamp duty may be paid on loan contracts;

3. Tax supervision on related-party transactions: If a loan is If the party has a related relationship with the lender, its borrowing transactions may be subject to related transaction supervision by the tax authorities;

4. Risks of tax avoidance: Borrowing transactions must not be used for tax avoidance purposes, otherwise you may face penalties from the tax authorities;

5. Borrowing must not be used for illegal purposes: funds obtained from borrowing must be used for legal purposes, otherwise it may involve tax violations.

To sum up, borrowing activities between individuals and enterprises involve a variety of tax treatments, including the need for enterprises to withhold and pay 20% personal income tax when paying personal loan interest, and at the same time, enterprises will pay interest It is included in financial expenses without paying other related taxes, and stamp tax is paid at 0.05‰ of the contract amount when signing a loan contract, which reflects the applicability of personal income tax to different types of income.

Legal basis:

"Implementation Measures for the Pilot Program of Replacing Business Tax with Value-Added Tax"

Article 1

In the People's Republic of China*** Units and individuals that sell services, intangible assets or real estate within the territory of China are VAT taxpayers and shall pay VAT in accordance with these Measures. Interest charged by individuals who provide loan services to units is subject to a 3% value-added tax. When the unit pays interest, the individual should apply to the tax authority for the issuance of a value-added tax invoice. Monthly interest income does not exceed 150,000 yuan (or quarterly income does not exceed 450,000 yuan), and you can enjoy VAT and surcharge exemptions when opening a company on your behalf.