Income Tax Treatment of Enterprise Debt Restructuring Measures
企业债务重组业务所得税处理办法
The PRC tax authorities move in to prevent the loss of tax revenue arising from debt restructuring activities.
(Issued by the State Administration of Taxation on January 23 2003 and effective as of March 1 2003.)
（国家税务总局於二零零三年一月二十三日发布，自二零零三年三月一日起施行。）
Article 1: These Procedures have been formulated in accordance with the PRC Enterprise Income Tax Tentative Regulations and its implementing rules, in order to strengthen the administration of the income tax treatment of enterprise debt restructuring and to prevent the loss of tax revenue.
第一条为加强对企业债务重组业务的所得税管理，防止税收流失，根据《中华人民共和国企业所得税暂行条例》及其实施细则的规定，制定本办法。
Article 2: For the purposes of these Procedures, the term "debt restructuring" means all matters between a creditor (enterprise) and a debtor (enterprise) that involve modification of the conditions of the debt.
第二条本办法所称债务重组是指债权人(企业)与债务人(企业)之间发生的涉及债务条件修改的所有事项。
Article 3: Debt restructuring includes the following methods:
第三条债务重组包括以下方式：
(1) the cash discharge of a debt at less than its tax base;
(一) 以低于债务计税成本的现金清偿债务；
(2) the discharge of a debt with non-cash assets;
(二) 以非现金资产清偿债务；
(3) debt-to-capital swap, including State-owned enterprise debt-to-equity swaps;
(三) 债务转换为资本，包括国有企业债转股；
(4) modification of other conditions of the debt, such as granting of time, granting of time combined with charging of additional interest, granting of time combined with reduction of the principal of the debt or interest on the debt, etc.; and
(四) 修改其他债务条件，如延长债务偿还期限、延长债务偿还期限并加收利息、延长债务偿还期限并减少债务本金或债务利息等；
(5) hybrid restructuring carried out by combining two or more of the above methods.
(五) 以上述两种或者两种以上方式组合进行的混合重组。
Article 4: Unless otherwise provided for in the enterprise's restructuring or liquidation, the income tax treatment of a debtor's (enterprise's) discharge of a debt with non-cash assets shall be based on a breakdown into two economic items, viz. the transfer of the non-cash assets at their fair value and the payment of the debt with the monetary amount corresponding to the fair value of the non-cash assets. The debtor (enterprise) shall recognize the income (or loss) from the transfer of the assets. The tax basis of the non-cash assets acquired by the creditor (enterprise) shall be determined according to the fair value of the assets (including taxes and fees related to the transfer thereof), whereupon items deductible before enterprise income tax such as fixed asset depreciation charges, intangible asset amortization charges or carried-over merchandise sales costs shall be calculated on the basis of such tax basis.
第四条债务人(企业)以非现金资产清偿债务，除企业改组或者清算另有规定外，应当分解为按公允价值转让非现金资产，再以与非现金资产公允价值相当的金额偿还债务两项经济业务进行所得税处理，债务人(企业)应当确认有关资产的转让所得(或损失)；债权人(企业)取得的非现金资产，应当按照该有关资产的公允价值(包括与转让资产有关的税费)确定其计税成本，据以计算可以在企业所得税前扣除的固定资产折旧费用、无形资产摊销费用或者结转商品销售成本等。
Article 5: In the course of debt-to-capital restructuring, the difference between the book value of the restructured debt and the fair value of the equity held by the creditor by virtue of the relinquishment of his claim shall be recognized by the debtor (enterprise) as debt restructuring income and booked as taxable income for that period, and the fair value of the equity held by the creditor shall be recognized by the creditor (enterprise) as the tax basis of the investment, unless otherwise provided for in the enterprise's restructuring or liquidation.
第五条在以债务转换为资本方式进行的债务重组中，除企业改组或者清算另有规定外，债务人(企业)应当将重组债务的账面价值与债权人因放弃债权而享有的股权的公允价值的差额，确认为债务重组所得，计入当期应纳税所得；债权人(企业)应当将享有的股权的公允价值确认为该项投资的计税成本。
Article 6: In the course of debt restructuring, if the concessions that the creditor makes to the debtor include debt payment with cash, non-cash assets, etc. at less than the tax basis of the debt, the debtor shall recognize the difference between the tax basis and the cash amount paid or the fair value of the non-cash assets (including the taxes and fees related to the transfer thereof) as debt restructuring income and book the same as taxable income for that period. The creditor shall recognize the difference between the tax basis of the restructured claim and the cash or the fair value of the non-cash assets received as a debt restructuring loss for that period and offset it against its taxable income.
第六条债务重组业务中债权人对债务人的让步，包括以低于债务计税成本的现金、非现金资产偿还债务等，债务人应当将重组债务的计税成本与支付的现金金额或者非现金资产的公允价值(包括与转让非现金资产相关的税费)的差额，确认为债务重组所得，计入企业当期的应纳税所得额中；债权人应当将重组债权的计税成本与收到的现金或者非现金资产的公允价值之间的差额，确认为当期的债务重组损失，冲减应纳税所得。
Article 7: If debt restructuring is carried out by means of modification of other conditions of the debt, the debtor shall write down the tax basis of the restructured debt to the amount payable in the future, and recognize the amount of the writedown as debt restructuring income for that period. The creditor shall write down the tax basis of the claim to the amount receivable in the future, and recognize the amount of the writedown as a debt restructuring loss for that period.
第七条以修改其他债务条件进行债务重组的，债务人应当将重组债务的计税成本减记至将来应付金额，减记的金额确认为当期的债务重组所得；债权人应当将债权的计税成本减记至将来的应收金额，减记的金额确认为当期的债务重组损失。
Article 8: If the asset transfer income or debt restructuring income recognized in the course of debt restructuring by virtue of debt payment with non-cash assets or by virtue of concessions granted by the creditor is relatively large and payment of tax in a lump sum would cause genuine difficulty, the income may be broken up into equal amounts to be included in the annual taxable income over a period of not more than five tax years, subject to the approval of the tax authorities-in-charge.
第八条企业在债务重组业务中因以非现金资产抵债或因债权人的让步而确认的资产转让所得或债务重组所得，如果数额较大，一次性纳税确有困难的，经主管税务机关核准，可以在不超过5个纳税年度的期间内均匀计入各年度的应纳税所得额。
Article 9: Subject to the approval of the tax authorities-in-charge, if the terms of a debt restructuring between affiliated parties involve a concession whereby one party's profits are passed to the other party, the matter may be handled in accordance with Article 4 through Article 8 of these Procedures, as appropriate, provided that there is a genuine business need to do so and the debt restructuring:
第九条关联方之间发生的含有一方向另一方转移利润的让步条款的债务重组，有合理的经营需要，并符合以下条件之一的，经主管税务机关核准，可以分别按照本办法第四条至第八条的规定处理：
(1) has been approved in a court ruling; or
(一) 经法院裁决同意的；
(2) has been provided for in an agreement consented to by all the creditors; or
(二) 有全体债权人同意的协议；
(3) takes the form of an approved debt-to-equity swap by a State-owned enterprise.
(三) 经批准的国有企业债转股。
Article 10: In principle, if a debt restructuring between affiliated parties involves concessionary terms but does not comply with the conditions stipulated in Article 9 hereof, the creditor may not recognize the restructuring loss and the concession shall instead be deemed to be a gift, which the debtor shall recognize as gift revenue. If the debtor is a shareholder of the creditor, the concession made by the creditor shall be inferred to be a distribution by the enterprise to the shareholder and the matter shall be handled in accordance with Item (2) of Article 1 of the State Administration of Taxation, Several Income Tax Questions Concerning Enterprise Equity Investments Circular (ref. Guo Shui Fa [2000] No.118).
第十条不符合本办法第九条规定条件的关联方之间的含有让步条款的债务重组，原则上债权人不得确认重组损失，而应当视为捐赠，债务人应当确认捐赠收入；如果债务人是债权人的股东，债权人所作的让步应当推定为企业对股东的分配，按照《国家税务总局关于企业股权投资业务若干所得税问题的通知》(国税发[2000]118号)第一条第(二)项的规定处理。
Article 11: For the purposes of these Procedures, the term "fair value" means the fair price of a business transaction conducted at arm's length.
第十一条本办法所称公允价值是指独立企业之间业务往来的公平成交价值。
Article 12: These Procedures shall be implemented as of March 1 2003.
clp reference:3300/03.01.23promulgated:2003-01-23effective:2003-03-01第十二条本办法自2003年3月1日起施行。
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