There are two major tax risks in the outstanding loans between affiliated enterprises: 1. Outstanding loans between affiliated enterprises will face the risk of paying business tax and enterprise income tax in accordance with the financial and insurance industry. Regarding the tax-related issues of transferring funds to others without compensation, Article 1 of the Provisional Regulations of the People's Republic of China on Business Tax (the State Council Order No.540, 2008) stipulates that units and individuals that provide labor services, transfer intangible assets or sell real estate in People's Republic of China (PRC) are taxpayers of business tax and shall pay business tax in accordance with these regulations. Article 3 of the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Business Tax (Order No.52 of People's Republic of China (PRC) Ministry of Finance and State Taxation Administration of The People's Republic of China, 2008) stipulates that the provision of labor services, the transfer of intangible assets or the sale of real estate mentioned in Article 1 of the Regulations refers to the paid provision of labor services, the paid transfer of intangible assets or the paid transfer of real estate ownership. The above-mentioned "paid" refers to obtaining money, goods or other economic benefits. Therefore, business tax will not be paid for capital transactions (free loans) between companies or between individuals and companies if money, goods or other economic benefits are not obtained. Because there is no income from outstanding loans, it does not involve corporate income tax. What taxpayers need to pay attention to is that an enterprise lends idle funds to another enterprise, stipulating that the enterprise will not charge interest, but the behavior of another enterprise providing other services or commodities at a price lower than the market price cannot be regarded as free. As long as there is no interest on inter-enterprise loans, the tax authorities will explore ways for them to obtain other economic benefits. If an enterprise obtains the services or commodities of another enterprise at a price lower than the market price or even free of charge, the tax authorities can judge that the loan of the enterprise is a "paid" behavior according to this relationship, and then determine its taxable turnover. If it is really free, taxpayers have the obligation to prove the legitimacy of their "free" borrowing reasons. If it is a loan between affiliated enterprises, legally speaking, the provisions of the provisional regulations on business tax are applicable to both affiliated enterprises and non-affiliated enterprises. In other words, as long as it is true and the tax authorities decide that it is reasonable not to charge interest, business tax will not be levied. The core of the problem is that there are "unreasonable business arrangements" between affiliated enterprises, and the tax authorities have the right to analyze and judge whether to levy business tax. According to Guo Fa [1995]No. 156, loans belong to the taxation scope of "financial insurance", and loans refer to the act of lending funds to others for use. According to this regulation, no matter financial institutions or other units, as long as they lend funds to others, they should be regarded as lending activities and business tax should be levied according to the tax item of "financial insurance". According to the provisions of Article 36 of the Tax Administration Law, business dealings between affiliated enterprises shall be charged or paid according to business dealings between independent enterprises; The tax authorities have the right to make reasonable adjustments if the amount of taxable income or income is reduced without collecting or paying the price or expenses according to the business dealings between independent enterprises. The "right" here means that the tax authorities have the right to make reasonable adjustments, so this "right" means "can" rather than "must" or "should", that is, the tax authorities can use this right after making a judgment that adjustments should be made. However, it is precisely because the tax authorities have this power that once the loans between affiliated enterprises have low or no interest, they are likely to be included in the scope of "tax adjustment" by the tax authorities to deal with tax risks. Based on the above analysis, it can be concluded that the outstanding loans between non-affiliated enterprises do not need to pay the financial and insurance business tax, but the outstanding loans between affiliated enterprises do. 2. Interest expenses paid to banks by enterprises that lend bank loans to others free of charge shall not be deducted before tax. Lending bank loans to others for free is essentially an act of transferring the benefits obtained by the enterprise to others. Therefore, the tax authorities have the right to verify their loan income according to the bank's loan interest rate for the same period, and apply the provisional regulations on business tax to levy business tax according to the tax item of "financial industry". With regard to enterprise income tax, according to Article 8 of the Enterprise Income Tax Law of People's Republic of China (PRC), reasonable expenses actually incurred by an enterprise, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted when calculating taxable income. Accordingly, if an enterprise transfers a bank loan to another enterprise for free, the interest paid has nothing to do with the income obtained by the enterprise, and the taxable income should be increased. In view of the tax-related risks of the above-mentioned free loans between affiliated enterprises, enterprises should adopt the following control strategies: (1) when the right to use funds between affiliated enterprises is transferred and used, it cannot be used free of charge; If it happens in a fiscal year, there is generally no risk of paying business tax and enterprise income tax. Cross-year loans should be used for compensation, and the interest-receiving party should go to the local tax department to issue invoices. At the same time, according to the provisions of Caishui [2008] 12 1, affiliated enterprises must pay attention to: the ratio of accepting creditor's rights investment and equity investment of related parties is 2: 1. Tax-related analysis of one enterprise lending funds to another enterprise for free (1) Case introduction An enterprise temporarily lends its own idle funds of 3 million yuan to another enterprise for six months, and the agreement stipulates that no interest will be charged. Another enterprise returned 3 million yuan to the enterprise as agreed, and did not pay interest to the enterprise. In this case, should the enterprise calculate the interest income and pay the relevant taxes according to the bank interest in the same period or in other ways? Does the tax authority have the right to verify its interest income? In addition, if it is not the idle funds of the enterprise itself, but the bank loan of the enterprise is used by another enterprise for free, does the enterprise need to make tax adjustment? (2) Tax-related analysis According to the above-mentioned tax-related analysis of outstanding loans between affiliated enterprises, it can be known that an enterprise temporarily lends its own idle funds of 3 million yuan to another enterprise for six months, and the agreement stipulates that there is no need to pay interest, and the other enterprise will return 3 million yuan to the enterprise when it expires. If the two enterprises are not related, there is no need to pay business tax; If there is a relationship, the interest income shall be calculated according to the bank interest or other methods in the same period, and the business tax and enterprise income tax shall be paid. The tax authorities have the right to verify the interest income. If it is not the idle funds of the enterprise itself, but the bank loan of the enterprise is used by another enterprise for free, the enterprise needs to make tax adjustment.