In a tax year, if an individual investor borrows money from his investment enterprise (except a sole proprietorship enterprise or a partnership enterprise), and it is neither returned nor used for the production and operation of the enterprise after the end of the tax year, the unpaid loan can be regarded as the dividend distribution of the enterprise to the individual investor, and personal income tax can be levied according to the item of "interest, dividend and dividend income". State Taxation Administration of The People's Republic of China also issued an announcement, emphasizing the strengthening of the management of individual investors' borrowing from their investment enterprises. Personal income tax will be levied in strict accordance with the relevant regulations on loans with a term exceeding 1 year and not used for the production and operation of enterprises. Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Regulating the Administration of Individual Income Tax Collection of Individual Investors Article 1 On the Handling of Individual Investors Paying Consumption Expenditure and Purchasing Family Property for themselves, their family members and their related personnel with the funds of enterprises (including sole proprietorship enterprises, partnerships and other enterprises), individual investors of sole proprietorship enterprises and partnerships take the enterprise funds as their own, Family members and their related personnel pay consumption expenses unrelated to the production and operation of the enterprise and purchase property expenses such as automobiles and houses, which are regarded as the profits distributed by the enterprise to the individual investors and incorporated into the income from the individual production and operation of the investors, and personal income tax is levied according to the item of "income from the production and operation of individual industrial and commercial households". Consumer expenditures unrelated to the production and operation of the enterprise and property expenditures such as the purchase of automobiles and houses paid by individual investors of enterprises other than sole proprietorship enterprises and partnership enterprises for themselves, their family members and their related personnel shall be regarded as the dividend distribution of enterprises to individual investors, and personal income tax shall be levied according to the items of "interest, dividends and bonus income". The above expenses of the enterprise are not allowed to be deducted before income tax.

Legal objectivity:

Article 2 of the Individual Income Tax Law Individual income tax shall be paid on the following personal income: (1) Income from wages and salaries; (2) Income from remuneration for labor services; (3) Income from remuneration; (4) Income from royalties; 5. Operating income. (6) Income from interest, dividends and bonuses; (7) Income from property lease; (8) Income from property transfer; (9) Accidental income. Individual income tax shall be calculated on a consolidated basis in the tax year in which individual residents obtain income from items 1 to 4 of the preceding paragraph (hereinafter referred to as comprehensive income); Non-resident individuals who obtain income from items 1 to 4 of the preceding paragraph shall calculate individual income tax on a monthly or itemized basis. Taxpayers who obtain income from items 5 to 9 of the preceding paragraph shall calculate individual income tax separately in accordance with the provisions of this law.