Letter Submitted to Shanghai Municipal Tax Service (State Taxation Administration) on the debt-to-equity ratio applied to Equipment Leasing Companies (ELC)
2022-01-28 | Beijing, Shanghai
On Friday 28 January 2022, the Non-Banking Financial Institutions (NBFI) working group sent a letter to Shanghai Municipal Tax Service State Taxation Administration to draw their attention to the debt-to-equity ratio applied to equipment leasing companies (ELC).
Informed by the Chamber’s Non‐Banking Financial Institutions (NBFI) working group chair of Changning district Tax Bureau’s interest in non‐banking finance and equipment leasing, the European Union Chamber of Commerce in China agreed to prepare a short report on European equipment leasing companies (ELC) in China.
In December 2021, the European Chamber invited its ELC members in China to take part in a benchmarking exercise to obtain data on their related party debt‐to‐equity ratio to support their case in front of the tax bureau.
The Chamber advocated using the same thin‐capitalization ratio (5:1) for leasing companies as for financial institutions.