Authorities Clarify Treatment of Interest Income and Expense
Jun. 23 – Authorities have released a letter clarifying the tax treatment of interest income and expense.
Letter 1713/TCT-CS provides that net interest income and net foreign exchange gains should be considered as other income. Under corporate income tax regulations, other income is meted a 25 percent tax applicable for the 2009 tax finalization.
In response to this, companies are advised to double check their 2009 CIT calculation to verify if calculations for the category of other income is correct.
The CIT rate was changed from 28 percent to 25 percent last year. The government has also delayed the schedule for filing quarterly payments of corporate income tax for 2010.
The deadline for tax payments for the first quarter of the year has been changed to July 30, 2010 while the second quarter payment deadline is now rescheduled to October 30, 2010. The third quarter payment deadline is on January 31, 2011 and the fourth quarter payment is due on April 30, 2011.