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What is interest tax? What is the calculation formula of interest tax

We know that tax issues are closely related to every citizen, and we should actively and honestly pay taxes. Because of the previous entertainment tax issues, the word "tax" has been pushed back to the public view. Today, I want to talk about the interest tax, what is the interest tax? How to calculate the interest, etc. Let's study together.

What is interest tax?

The so-called 'interest tax' actually refers to the 'interest, dividend and bonus income' tax items of individual income tax, mainly refers to the individual income tax levied on the interest income obtained by individuals saving RMB and foreign currency in China.

The collection, suspension or reduction of personal income tax (interest tax) on interest income of savings deposits has a certain regulating function on the economy. Many countries in the world generally levy interest taxes.

What is the current interest tax?

China's interest tax began in 1950. According to the regulations on interest income tax issued in that year, 10% (later reduced to 5%) of the income tax was levied on deposit interest;

Interest tax was suspended in 1959;

On November 1, 1999, according to the decision of the 11th meeting of the Standing Committee of the Ninth National People's Congress on Amending the individual income tax law of the people's Republic of China, the collection was resumed again, with a tax rate of 20%;

On August 15, 2007, the tax rate was reduced from 20% to 5%;

From October 9, 2008, interest tax will be temporarily exempted.

How to calculate interest tax?

Interest before tax

〔1〕 Interest before tax = [principal] & times; [interest rate] & times; [deposit period]

Interest tax

〔2〕 Interest tax = [principal] & times; [interest rate] & times; [deposit period] & times; [tax rate]

Interest after tax

〔3〕 Interest after tax = interest & times; (1-interest tax)