Bank interest income is subject to business tax, while corporate or individual interest income is not subject to business tax

Document: Financial Interpretation of Business Tax Regulations

The State Administration of Taxation issued the "Business Tax" Notice of Guoshuifa [1993] No. 149 of "Annotations to Tax Items (Trial Draft)"

(1) Finance

Finance refers to the business of operating monetary and financial financing activities, including loans, financing Leasing, financial product transfer, financial brokerage and other financial businesses.

1. Loan refers to the business of lending funds to others, including self-owned fund loans and on-lending.

Own capital loan refers to lending one’s own capital or deposits from units and individuals absorbed to others.

On-lending refers to lending borrowed funds to others.

Mortgage lending operations in the pawn industry, regardless of the source of funding, are taxed as own-fund loans.

There is no tax on the loan business of the People's Bank of China.

2. Financial leasing refers to the equipment leasing business with the characteristics of financing and ownership transfer. That is: the lessor purchases equipment and leases it to the lessee according to the specifications, models, performance and other conditions required by the lessee. During the contract period, the ownership of the equipment belongs to the lessor, and the lessee only has the right to use it. After the rent is paid off at the end of the contract, the lessee A person has the right to purchase equipment based on its residual value to gain ownership of the equipment. All financial leases, regardless of whether the lessor sells the residual value of the equipment to the lessee, are taxed according to this tax item.

3. Financial product transfer refers to the act of transferring ownership of foreign exchange, securities or non-goods futures.

Non-cargo futures refer to futures other than commodity futures and precious metal futures, such as foreign exchange futures.

4. Financial brokerage industry refers to the business of entrusting others to operate financial activities on behalf of others.

5. Other financial businesses refer to various financial businesses other than the above-mentioned businesses, such as bank settlement, bill discounting, etc. No business tax is levied on deposits or purchases of financial products.