1. Interest on related party loans
1. Interest expenses paid by enterprises to related parties when borrowing from related parties
According to Article 46 of the Enterprise Income Tax Law of the People's Republic of China (Decree No.63 of the President of the People's Republic of China): "Interest incurred when the ratio of creditor's rights investment to equity investment accepted by enterprises from their related parties exceeds the prescribed standard.
according to article 1 of the notice of State Taxation Administration of The People's Republic of China of the Ministry of finance on tax policy issues concerning pre-tax deduction standards for interest expenses of related parties of enterprises (Cai Shui [28] No.121): "When calculating taxable income, the interest expenses actually paid by enterprises to related parties shall not exceed the following proportion and the part calculated by the relevant provisions of the tax law and its implementing regulations, and the excess part shall not be deducted in the current and subsequent years.
except for the interest expenses actually paid by the enterprise to the related parties, in accordance with the provisions of Article 2 of this Notice, the ratio of creditor's rights investment to equity investment of the related parties is:
(1) for financial enterprises, it is 5: 1;
(2) other enterprises, 2: 1.
if the enterprise can provide relevant information in accordance with the relevant provisions of the tax law and its implementing regulations, and prove that the relevant trading activities conform to the principle of independent trading; Or if the actual tax burden of the enterprise is not higher than that of domestic related parties, the interest expenses actually paid to domestic related parties shall be deducted when calculating the taxable income. "
2. Deduction of interest expenses paid to related parties by investment companies with financial business and non-financial business
According to Article 3 of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Tax Policy Issues Concerning Pre-tax Deduction Standards for Interest Expenses of Related Parties of Enterprises (Caishui [28] No.121), "If an enterprise is engaged in both financial business and non-financial business, the actual interest expenses paid to related parties shall be in a reasonable way. If it is not calculated separately according to a reasonable method, the interest expenses that are allowed to be deducted before tax shall be calculated according to the proportion of other enterprises in Article 1 of this Notice. "
3. Deduction of interest expenses incurred by non-financial enterprises in borrowing from financial enterprises
According to Article 38 of the Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China (Order No.512 of the People's Republic of China and the State Council): "The following interest expenses incurred by enterprises in their production and operation activities are allowed to be deducted: (1) Interest expenses incurred by non-financial enterprises in borrowing from financial enterprises, interest expenses incurred by financial enterprises.
4. Deduction of interest expenses incurred by non-financial enterprises in borrowing from non-financial enterprises
According to Article 38 of the Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China (Order No.512 of the People's Republic of China and the State Council): "The following interest expenses incurred by enterprises in their production and operation activities are allowed to be deducted: (2) Interest expenses incurred by non-financial enterprises in borrowing from non-financial enterprises are not allowed.
5. Deduction of interest expenses incurred by enterprises due to investors' inadequate investment
According to State Taxation Administration of The People's Republic of China's Reply on Deduction of Interest Expenses before Enterprise Income Tax (Guoshuihan [29] No.312): "Regarding the deduction of interest expenses incurred by enterprises due to investors' inadequate investment, According to Article 27 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China, if an enterprise investor fails to pay in full its payable capital within the prescribed time limit, the interest incurred by the enterprise in borrowing from abroad is equivalent to the interest payable on the difference between the paid-in capital and the payable capital within the prescribed time limit, which is not a reasonable expenditure of the enterprise and should be borne by the enterprise investor, and shall not be deducted when calculating the taxable income of the enterprise.
The specific calculation of interest that cannot be deducted should be based on the period in which each book paid-in capital and loan balance of the enterprise remain unchanged in one year, and the interest of loan that cannot be deducted in each calculation period should be calculated by multiplying the amount of loan interest in that period by the proportion of the unpaid registered capital of the enterprise to the total loan in that period. The formula is:
the loan interest that the enterprise can't deduct in each calculation period = the loan interest amount in this period × the unpaid registered capital in this period ÷ the loan amount in this period
The total loan interest that the enterprise can't deduct in a year is the sum of the loan interest amount that can't be deducted in each calculation period in that year. "