Circular of the State Administration of Taxation on Issues Concerning Business Tax on the Financial Industry

Circular of the State Administration of Taxation on Issues Concerning Business Tax on the Financial Industry

Guo Shui Fa [2000] No. 6

January 10, 2000

With the primary aim of improving the policies in order to strengthen administration of the business tax on the financial industry, the relevant issues are hereby clarified as follows:

Article 1 Specific operation issues in regard to the collection of the business tax on the businesses of on-lending foreign exchanges
(I) Where all the head offices of the banks (excluding the Bank of China) uniformly borrow foreign funds from outside the territory of China and lend them to customers through their affiliated branches, the taxable turnover shall be the balance of the interest from the loans that the affiliated branches collect from the customers minus the interest on borrowing paid to the entities outside the territory of China.
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