Fines, fines and confiscation of property losses belong to the category of administrative punishment and may not be deducted before enterprise income tax. Bank penalty interest belongs to the liquidated damages paid by taxpayers in accordance with the provisions of economic contracts, not administrative fines, so it can be deducted before enterprise income tax.

Second, analysis

Bank penalty interest is a fine paid by the borrower for overdue repayment on the specified date. Lenders can postpone loans. At this time, lenders will generally modify the original term, and during the remaining loan term, lenders will raise interest rates, which is called default interest rates. One principle that needs to be clarified is whether economic and business penalties can be deducted from enterprise income tax and whether administrative penalties can be deducted from enterprise income tax.

Third, how to calculate the penalty interest of the bank?

1. If the borrower fails to repay the loan, the overdue penalty interest will generally rise by 30% ~ 50% on the basis of the original loan interest rate;

2. If the borrower fails to use the credit funds according to the purpose of the loan, the bank will immediately recover the loan or increase it by 50% ~100% on the basis of the original loan interest rate;

3. If the repayment is overdue or the funds are not used according to the specified purposes, the bank will calculate the penalty interest from the date of overdue repayment or the date of using the funds until the borrower pays off the loan principal and interest. Note: If the borrower fails to pay the interest in time, compound interest will be calculated at the penalty interest rate.

According to the regulations of the People's Bank of China, the current default interest rate of banks in loans overdue can be increased by 30% to 50% on the basis of the loan interest rate agreed in the loan contract. In other words, the default interest rate of banks in loans overdue can fluctuate between 30% and 50%. Even if commercial banks calculate according to the minimum penalty interest rate of 30%, it is not a small expense.