The interest income from borrowing from individuals and enterprises shall be subject to the proportional tax rate of 20% in accordance with the provisions of Item 5 of Article 3. The interest income from private lending shall be declared and taxed in accordance with the provisions of national laws, and the tax amount shall be calculated by multiplying the interest income by 20%. It is suggested that the interest tax should be taken into account when determining the interest rate of private lending.
 Legal basis
 Article 3 of the Individual Income Tax Law of the People's Republic of China:
 （1） For comprehensive income, progressive tax rates ranging from 3% to 45% for excess income shall apply (the tax rate table is attached below);
 （2） The excess progressive tax rate of 5% to 35% shall apply to business income (the tax rate table is attached below);
 （3） Income from interest, dividends and bonuses, income from the lease of property, income from the transfer of property and incidental income shall be subject to a proportional tax rate of 20 per cent.