If the loan borrowed by the boss from the company has not been used for the production and operation of the enterprise for more than one year, it is generally subject to personal income tax.

According to the explanation issued by the Tax Service Department of State Taxation Administration of The People's Republic of China on March 9, 2006, if an individual investor borrows money from an enterprise (except a sole proprietorship enterprise or a partnership enterprise) that he invests in, 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 the individual income tax is calculated and paid according to the interest, dividend and bonus income.

According to Item (4) of Article 35 of the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Printing and Distributing the Measures for the Administration of Individual Income Tax (Guo Shui Fa [2005] 1 20), the management of loans granted by individual investors to their investment enterprises is strengthened, and loans that have not been used for the production and operation of enterprises for more than1year are taxed in strict accordance with relevant regulations.

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Applicable tax rate

Personal income tax has three different tax rates according to different tax items:

Comprehensive income (income from wages and salaries, income from labor remuneration, and income from royalties) is subject to a 7-level progressive tax rate, and tax is calculated according to the monthly taxable income. The tax rate is classified according to the taxable income of individual monthly wages and salaries, with the highest level being 45%, the lowest level being 3%, and the ***7 level.

Operating income is subject to 5 levels of excess progressive tax rate. The income from production and operation of individual industrial and commercial households and the annual taxable income from contracted operation and lease operation of enterprises and institutions are classified into grades, with the lowest grade being 5%, the highest grade being 35%, and the first grade being 5.

Proportional tax rate. Personal income tax is levied on personal income such as interest, dividends, bonus income, property lease income, property transfer income, accidental income and other income, and the proportional tax rate of 20% is applicable.

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