September 6, 2018 / 3:57 AM / in 9 months

China to exempt VAT for interest income from loans to smaller firms - finance ministry

Chinese Finance Minister Liu Kun attends an interview with Reuters at the Ministry of Finance in Beijing, China, August 23, 2018. REUTERS/Jason Lee/File Photo

BEIJING (Reuters) - China’s finance ministry said on Thursday 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.

Interest income from loans with lending rate no higher than 150 percent of benchmark official lending rate will be exempt from VAT, the finance ministry said on its website. It added that interest earned from loans with lending rate higher than 150 percent of benchmark rate will incur the current VAT policy.

Reporting by Beijing Monitoring Desk; Editing by Simon Cameron-Moore

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