The State Administration of Taxation (SAT) issued a notice concerning tax treatment of hybrid (equity–debt) financing of investment on 15 July 2013 (SAT Gong Gao [2013] No. 41). The notice applies as from 1 September 2013 and its content is summarized below.
In the case of an equity–debt investment made by an enterprise, the interest paid by the invested enterprise must be recognized on the due date of the interest (including guaranteed minimum interest, fixed profit or fixed dividend) a…