Analysis and Discussion on the Tax Issues of Perpetual Bonds

Abstract

From the perspective of issuers and investors, this paper analyzes the issue of corporate income tax and turnover tax related to perpetual bonds. From the perspective of tax planning, the tax-saving effect of perpetual bonds recognized as liabilities is considerable. However, there are duplicate tax issues for investors' income. In order to eliminate the problem of double taxation, this paper proposes that the investor's perpetual debt income should be treated as tax-free income. From the perspective of turnover tax, investors should pay VAT regardless of whether they can issue special VAT invoices. However, the issue fee and underwriting income of the issuer's interest expenses and financing are not deductible.