China Bank Loans Loss Of Tax Policy Studies

According to the statistics of China Banking Regulatory Commission, the ratio of China commercial banking non-per forming loan has decreased year by year, and the provision coverage ratio has risen year by year. At the end of 2009, the ratio of China commercial banking non-performing loan has dropped to the low level of 1.58%, meanwhi le the provision coverage ratio of commercial banks has reached a recorded height of 155%, which indicates that China banking has made a great development through the reform in recent years. However facing with more and more complex and intense financial competition, China banking still has a long way to go. So the state must give strong support to the banking in order to keep the development, tax as a powerful tool of regulating should play an important role. Nowadays, the issue of China banking facing is the tax policy of loan losses, the specific situation is that China has established the institution of Five-Category Classification of Loan Assets, and banks have drew the appropriate loss reserve according to the institution of Five-Category Classification of Loan Assets, but the appropriate loss reserve drew is not allowed to be deducted and tax deductions for loan losses must have be approved. So the tax policy of has affected the timely processing of loan losses for banking.Therefore, reforming our current tax policy of bank loan losses is greatly significant! This paper analyzes the theoretical basis of taxation system for bank loan losses, introduces the international practice of the treatment of bank loan losses, detail analyzes our current tax policy of bankloan losses, points out its problems and the possible impact of banking and macroeconomic, and put forward views and proposals for reforming our tax policy of bank loan losses. Specific ideas are that, in order to keep the stable development of our banking, it should maintain the existed taxation system for bank loan losses in short time, but the proportional of deduction and the procedures of verification need to be adjusted structurally. Thus, after a period of transition, it ultimately establishes a specific reserve system according to the reality of China.