The income from debt interest does not belong to assets or liabilities, but its tax basis can be calculated in the form of liabilities. Tax basis of liabilities = book value-the amount that can be deducted in the future. Debt interest is tax-free and deducted before tax when calculating taxable income, so the amount that can be deducted before tax in the future period is 0, so the tax basis at this time = book value.
Debt interest income refers to the interest income obtained by enterprises holding government bonds issued by the financial department of the State Council. The realization of interest income should be confirmed on the date of issuance of national debt. When making accounting entries, debt interest income should be included in investment income.
Exemption of corporate income tax from debt interest income is a policy that has been implemented for many years. The State Council 1992 issued the "People's Republic of China (PRC) Treasury Bill Regulations" (the State Council Decree No.95) Article 12 stipulates that the interest income of treasury bills enjoys tax exemption. At present, Article 21 of the Detailed Rules for the Implementation of the Interim Regulations on Enterprise Income Tax, which is domestically funded, also stipulates: "The interest income of taxpayers purchasing government bonds is not included in the taxable income."
Judging from the situation all over the world, it is also a common practice to exempt debt interest's income, mainly because debt interest is fully paid by the state financial funds. If tax is levied, on the one hand, it is equivalent to recovering part of the interest paid by the state finance through income tax, which has no practical significance; On the other hand, it will reduce the interest income that buyers of government bonds finally get, which is not conducive to encouraging enterprises to buy government bonds. Moreover, when enterprises buy government bonds, they basically have no corresponding costs and expenses while earning interest income. Therefore, tax exemption for debt interest income does not violate the principle of matching income with cost and expense. Therefore, the law retains this policy and stipulates in the first paragraph of Article 26 that the income from debt interest is tax-free income.
It is worth noting that although this law stipulates that the income from debt interest is tax-free, it does not mean that all income related to national debt can be tax-free. For the income obtained by the holders of treasury bonds from the transfer of treasury bonds in the secondary market, enterprise income tax should still be calculated and paid as the income from the transfer of property.
Matters needing attention
1. According to the Notice of the Ministry of Finance on Exemption of Interest on Local Government Bonds from Income Tax in State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) (2013) No.5, the interest income of local government bonds issued in 20 12 and later by enterprises and individuals is exempted from enterprise income tax and personal income tax.
2. The interest income of various corporate bonds held by enterprises is not tax-free. Article 18 of the Regulations for the Implementation of the Enterprise Income Tax Law clearly stipulates that bond interest income shall be included in the total income and enterprise income tax shall be levied.
3. The income from the transfer of government bonds in the secondary market and the fee income from the sale of government bonds by enterprises do not belong to debt interest income, and enterprise income tax should be paid according to regulations.