Q: The wholly-owned subsidiary has financial difficulties and it is difficult to find a guarantee company. Only the parent company can provide guarantees to carry out normal operations with loans. For the guarantee fees charged by the parent company based on the standards of external guarantee companies (issuing guarantee fee invoices for the subsidiary and withdrawing business tax), can the subsidiary deduct it before tax? Answer: Article 8 of the Enterprise Income Tax Law stipulates that reasonable expenditures actually incurred by an enterprise related to obtaining income, including costs, fees, taxes, losses and other expenditures, are allowed to be deducted when calculating taxable income. According to the above regulations, guarantee expenses incurred by subsidiaries that need to borrow from banks due to production and operation needs are reasonable expenses related to production and operation activities and can be deducted before tax according to regulations. However, in combination with Articles 41 and 46 of the Enterprise Income Tax Law, Articles 38 and 119 of the Implementation Regulations of the Enterprise Income Tax Law, and the Regulations of the Ministry of Finance and the State Administration of Taxation on Enterprise Notice on Tax Policy Issues Regarding Pre-tax Deduction Standards for Interest Expenditures of Related Parties" (Caishui [2008] No. 121), "Implementation Measures for Special Tax Adjustments [Trial]" (Guoshuifa [2009] No. 2) Chapter 9 on Thin Capitalization Clauses, debt investments indirectly obtained by an enterprise from related parties are also subject to the above clauses. According to Article 119 of the "Interim Regulations of the Enterprise Income Tax Law", the term "debt investment" as mentioned in Article 46 of the Enterprise Income Tax Law refers to the investment that an enterprise obtains directly or indirectly from related parties and needs to repay the principal and pay interest. Or financing that requires compensation in the form of other interest payments. Debt investments indirectly obtained by an enterprise from related parties include: (1) Debt investments provided by related parties through unrelated third parties; (2) Debt investments provided by unrelated third parties, guaranteed by related parties and jointly and severally liable (3) Other debt-related investments indirectly obtained from related parties with the nature of liabilities. Article 87 of Guoshuifa [2009] No. 2 stipulates that the interest expenses referred to in Article 46 of the Enterprise Income Tax Law include interest actually paid for directly or indirectly related debt investments, guarantee fees, mortgage fees and other interest-related properties. cost. "Notice of the Ministry of Finance and the State Administration of Taxation on Tax Policy Issues Regarding Pre-tax Deduction Standards for Interest Expenditures of Related Parties" (Caishui [2008] No. 121) stipulates that when calculating taxable income, the actual payment made by the enterprise to the related party The interest expense of the party shall be deducted as long as it does not exceed the proportion specified below and calculated according to the relevant provisions of the tax law and its implementation regulations. The excess shall not be deducted in the current period and subsequent years. The interest expenses actually paid by an enterprise to related parties, in addition to complying with the provisions of Article 2 of this Notice, the ratio of debt investment and equity investment it accepts from related parties is: (1) Financial enterprises, 5:1; (2) Other enterprises , is 2: 1. According to the above provisions, the situation described in the question is provided by a bank (unrelated third party) specified in Article 119 (2) of the Interim Regulations of the Enterprise Income Tax Law. Debt investments guaranteed by the parent company (related party) and jointly and severally liable.

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