Optimization Of Pre-tax Deduction Policy On Loan Interest In Corporate Income Tax

Several problems exist in the practical application of the current loan interest deduction policy,which not only have made the following obstacles for taxpayers,also increased the difficulties of execution tax authorities.In spite of the state administration of taxation has carried on the tax guidance through all kinds of documents,but the overall effect is not obvious,needing unified and feasible policy rules.In this paper,starting from the reasons of limited interest deduction,that's to say,the regulation of the folk lending,optimizing the capital structure,limitation on related transactions,based on the financial environment in our country and carries on the quantitative analysis by reference to the BEPS action plan,and finally puts forward optimization scheme of the enterprises loan interest deduction policy with Chinese characteristics,which can provide certain guiding suggestions for policy makers.This thesis considers that,for enterprises involved in related party transactions,the part of the loan interest incurred by the whole group not exceeding 30% of EBITDA can be fully deducted;For firms without related transactions,if according with small micro enterprise standards,as long as the borrowing rate is less than 36%,their interest can be deducted in full,if not,only when loan interest rate is less than 36% and the asset-liability ratio is less than 60%,related interest can be deducted in full,otherwise,reduce the interest deductions according to the percentage of ratio exceeding 60%.(For short,“Full deduction in general but limitation on portion”plan)This thesis considers that,for enterprises involved in related party transactions,the part of the loan interest incurred by the whole group not exceeding 30% of EBITDA can be fully deducted;For firms without related transactions,if according with small micro enterprise standards,as long as the borrowing rate is less than 36%,their interest can be deducted in full,if not,only when loan interest rate is less than 36% and the asset-liability ratio is less than 60%,related interest can be deducted in full,otherwise,reduce the interest deductions according to the percentage of ratio exceeding 60%.(For short,“Full deduction in general but limitation on portion”plan)...