Interest on local government bonds exempt from income tax

The Ministry of Finance and State Administration of Taxation (SAT) jointly issued a notice concerning the tax treatment of interest on local government bonds on 6 February 2013 (CaiShui [2013] No. 5). According to the notice, the interest derived by enterprises and individuals on bonds issued by local governments in 2012 and onwards is respectively exempt from enterprise income tax and individual income tax.

The interest on bonds issued by local governments in 2009, 2010 and 2011 is exem…