China’s FinMin: China to exempt VAT for interest income from loans to smaller firms

China’s Finance Ministry issued a statement on Thursday, announcing that interest income from loans by financial institutions to smaller firms will be exempt from value-added tax (VAT) from Sept. 1 until the end of 2020, Reuters reports.

Further Details:

Interest income from loans with the lending rate no higher than 150 percent of benchmark official lending rate will be exempt from VAT.

Interest earned from loans with the lending rate higher than 150 percent of the benchmark rate will incur the current VAT policy.