The Ministry of Finance and State Administration of Taxation jointly issued a notice (Cai Shui [2008] No. 130) on 28 September 2008 to state that the passive income derived by a non-resident enterprise referred in Para. 3 of Art. 3 of the Enterprise Income Tax Law (EITL) must be taxed on a gross basis. In determining taxable income, no taxes or fees can be deducted unless otherwise provided under Art. 19 of the EITL and Art. 103 of the Implementation Regulations of the EITL.
Debt-…