Interest-free loan from the founder tax consequences. Does a founder or organization have taxable income when receiving an interest-free loan? Is it possible to reduce the rate?

Stanislav Dzhaarbekov, Deputy Director, Chairman of the Expert Council
Institute for the Development of Modern Educational Technologies (IRSOT),
lawyer, certified auditor, member of the Moscow Audit Chamber

Today we will talk about interest-free loans between organizations. As a rule, such loans are issued within the organization of one group. As you know, since 2017, changes have occurred that have secured the provision of such loans and, in fact, legalized them.

Interest-free loans have always been legal. So, if regarding gratuitous transactions in Art. 575 of the Civil Code is a direct prohibition, then interest-free loans are expressly provided for by the Civil Code. Therefore, they have always been legal from the point of view of civil law. However, both the lender and the borrower in this case always have questions about taxes and doubts about tax risks. The first one is concerned whether his income will be accrued based on the market level of interest rate, and the second one is concerned whether the amount of material benefit in connection with receiving an interest-free loan will be included in his income.

What happened on November 30, 2016? Federal Law No. 401-FZ dated November 30, 2016 “On Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation” was adopted. This law established that transactions for the provision of interest-free loans between interdependent persons, the place of registration or place of residence of all parties, the beneficiary of which is the Russian Federation, are not recognized as controlled transactions. This is pp. 7, paragraph 4 art. 105.14 of the Tax Code

For interest-free loans, this is the only change, but for the provision of guarantees there were three of them. What do these changes affect? If you literally look at the norms of the code, they say that interest-free loans between interdependent Russian entities are not controlled. Controlled transactions are designated in Article 105.14 of the Tax Code. Their inconvenience is that it is necessary to indicate such a transaction in the notification of controlled transactions. And the tax authority has the right to check the level of market prices for each such transaction. The law in question actually established that interest-free loans between Russian related parties are recognized as uncontrollable, that is, the tax authority cannot control the prices of such a transaction.

In fact, this change is interpreted somewhat more broadly. In this situation, they say that the risk of the lender is also removed. Until 2017, the tax authorities lost all disputes where they tried to charge the lender the amount of income based on the level of the market interest rate on the loan. Moreover, the tax authority made such attempts both for controlled transactions and for uncontrolled ones. Example: two companies that are interdependent. One company issued another loan of 10 million rubles. The total turnover between them is small, so the transactions are uncontrollable. Let me remind you that transactions between Russian entities are considered controlled if the transaction amount in one year exceeds 1 billion rubles. And in this situation, tax officials often proposed to include in the lender’s income the amount of income based on the market level of interest rates on such transactions. There were many disputes before the new year, but all of them were lost by the tax authorities. Since 2017, thanks to changes in legislation, there should be no more disputes, because the code directly states that such transactions are not subject to control.

However, there is a legal flaw: sometimes uncontrolled transactions can be considered controlled. I hope that this law will be interpreted correctly, the lender’s risks will be completely removed, and there should be no problem with additional income tax assessment.

Let's speculate a little more. The Tax Code states that this exemption applies to the exemption of loans between Russian related parties. That is, if we issued a loan to a foreign interdependent organization, or a foreign one issued a loan to a Russian one, then this transaction falls under the definition of a controlled transaction, especially since there is no control threshold for interdependent transactions with foreign companies.

So, first: this protection is established for loans between Russian related parties.

And second: these are loans between interdependent persons. What if we have a loan between persons who are not interdependent? Why didn’t the code simply indicate: “between Russian persons”? What happens if the loan is between persons who are not recognized as interdependent?

In my opinion, there are no problems in this situation either. Based on the logic of the Tax Code, transactions between independent persons are not subject to control at all. And therefore this point was not discussed separately. So if we have an interest-free loan between independent parties, then it is also not subject to control, and the lender should not try to include in income the amount of the loan at the interest rate.

Now let's look at the situation from the borrower's side, that is, the party that received an interest-free loan. He has a question whether he should include in his income the amount of interest saved on this loan. If a Russian company issues a loan to individuals, then there is a mechanism for determining the material benefit and subsequent calculation of personal income tax. Are there the same problems when providing a loan to a company rather than an individual? Previously, this risk was very significant, there was a lot of controversy about it, but this issue was resolved already in 2004. Then the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated August 3, 2004 No. 3009/04 was issued. This resolution states that in the situation described, the borrower does not generate income. Disputes continued for some time, but since the tax authorities lost all the courts because of the mentioned Resolution, today this is a risk-free situation.

Does this protection apply to loans that were issued before the new year? Let's say one company issued another loan in November 2016. Is her loan protected by the terms of the Federal Law, or are they only valid for loans issued in 2017? Law 401-FZ does not contain any transitional provisions. Based on the established practice of interpreting changes in legislation, it can be assumed that this rule also applies to loans issued or received before 2017, but relative to January 1, 2017. If you received or issued a loan in 2016, then from January 1, 2017, there are no risks for either the lender or the borrower. For loans issued before 2016, nothing changes; this problem was resolved in 2004. There were risks for lenders before 2017. Now they are covered by the 2017 guarantees and it does not matter that this loan was received earlier.

I would like to draw your attention to the letter of the Ministry of Finance dated March 23, 2017 No. 03-03-RZ-/16846, which talks about new norms, in particular, the norms of Law 401-FZ, and it was directly stated that the borrower has no problems. This letter also writes about the lender, but, unfortunately, without any clear conclusion.

Interest-free loan agreement from the founder - download sampleyou can on our website - it has a number of noteworthy nuances in terms of accounting and tax accounting. Let's study them.

Interest-free loan received (issued): transactions

All payments under the loan agreement with the founder are made using the account:

• 66 - if the loan was received for a period not exceeding 12 months;
• 67 - if a long-term loan agreement has been drawn up with a maturity period of more than 12 months.

When receiving (issuing) an interest-free loan from the founder, the entries reflecting the fact of registration of this loan in the organization’s accounting will be as follows:

1. When a company receives a loan: Dt 51 (10, 41 - an account is selected depending on the type of inventory transferred under the loan agreement) - Kt 66 (if the loan is short-term, no more than 12 months), Kt 67 (if the loan long-term).

2. When the company repays the loan: Dt 66 (67) - Kt 51 (or an alternative account).

Moreover, if the company received an interest-free loan from the founder, the transactions are noticeably different from those that characterize the scenario when the company is a lender and the founder is a borrower. In this case, the following account correspondences apply:

1. When issuing a loan: Dt 76 (if the loan was issued to the founder) - Kt 51 (and alternative accounts).

2. When repaying the loan: Dt 51 - Kt 76.

Let us now study the specifics of taxation of an interest-free loan from the founder.

Do you doubt the correctness of a particular transaction? On our forum you can consult on any issue! So, we discuss the nuances of providing an interest-free loan.

Interest-free loan from the founder: taxation

When a company receives a loan from the owner, tax accounting is characterized by the following nuances:

1. Receiving a loan in the general case does not generate income for the organization, and repayment does not generate expenses (subclause 10, clause 1, article 251, clause 12, article 270, subclause 1, clause 1.1, article 346.15 of the Tax Code of the Russian Federation).

2. If the founder of the company is the only one or he owns more than 25% of its authorized capital, then he and the company are considered interdependent persons (subclause 2, clause 2, article 105.1 of the Tax Code of the Russian Federation).

In this case (and in others, when the founder and the organization are recognized as interdependent persons), the founder receives income in the form of lost interest on the loan (letter of the Ministry of Finance of Russia dated May 27, 2016 No. 03-01-18/30778). The amount of interest is determined according to the methods reflected in paragraph 1 of Art. 105.7 Tax Code of the Russian Federation.

3. The accrual of material benefits - enterprise income at a zero interest rate on the loan is not carried out (letter of the Ministry of Finance of the Russian Federation dated 02/09/2015 No. 03-03-06/1/5149).

In turn, if an interest-free loan is issued to the founder, then a material benefit is generated from savings on interest, and personal income tax is paid on it - at a rate of 35% (clause 1, clause 2, article 212, clause 2, article 224 of the Tax Code of the Russian Federation).

Let us now consider the structure in which an agreement on an interest-free loan between the founder and the company can be presented.

Where can I download a sample loan agreement?

The agreement in question contains the usual elements for loan agreements:

• preamble;
• sections on the subject of the agreement, the rights and obligations of the parties, liability, dispute resolution, final provisions, details.

It is important to include in the contract a direct indication that it is interest-free. Otherwise, interest will have to be charged on it at the key rate of the Bank of Russia, which, in turn, will form the taxable income of the lender (clause 1 of Article 809 of the Civil Code of the Russian Federation).

One of the most common options for helping the founder of his company is an interest-free loan. After the transfer of funds, an agreement is subsequently concluded to forgive this debt. But how legitimate this approach is is something that needs to be clarified. After the founder issues an interest-free loan, tax consequences arise in 2019.

Issuing an interest-free loan

The Tax Code allows the founder to issue interest-free loans to the organization. The size of the loan issued by the founder, as well as the terms of its repayment, can be any.

You can transfer the loan amount either to a current account or to the organization’s cash desk. There are no restrictions when transferring funds to a current account or to a cash register from an individual founder.

If the founder is a legal entity, the cash desk can accept from him an amount of only up to 100,000 rubles under one loan agreement.

A loan is a convenient and profitable scheme for an organization. When forming the tax base for income tax, the loan amount is not taken into account. And the loan operation itself is not subject to VAT.

For simplified organizations this scheme is also profitable. Funds received by an organization through the simplified tax system as a loan are not recognized as its income, and a repaid loan is not recognized as its expense. Income in the form of material benefits, which is taxed according to the simplified tax system, also does not arise when an organization receives an interest-free loan from the founder.

Tax risks

During a desk or tax audit, tax inspectors are recommended to identify facts that an organization has received an unjustified tax benefit. In particular, such a benefit may arise due to a decrease in the tax base as a result of understatement of transaction prices. If such a fact is revealed, tax authorities will assess additional tax based on market prices.

That is why a loan carries tax risks for the company and its owner. After all, if the tax authority considers that the consequence of the transaction was the receipt of an unjustified tax benefit, it will assess additional income tax based on the amount of interest on a comparable loan.

As for organizations on the simplified tax system, there is a certain risk for them too. If the loan issued by the founder is not repaid within the established time frame, the simplified organization will have taxable income. After all, accounts payable written off due to the expiration of the limitation period are non-operating income of the simplified organization and should be reflected in the tax base according to the simplified tax system.

The statute of limitations for accounts payable is 3 years. Its countdown begins on the day following the day set as the loan repayment date.

If the loan agreement states that the loan repayment period is January 31, 2019, the limitation period will be counted from February 1, 2019.

How to correctly record the issuance of a loan

It is safest to issue a loan from the founder at a certain percentage. Such income will be taken into account by the company that received the loan as non-operating income.

In this case, the organization can attribute the amount of interest on the loan to expenses, which, in turn, reduce the tax base for income tax.

Since loan operations are exempt from VAT, separate accounting must be maintained. If more than 5% of the organization’s total expenses are allocated to non-taxable transactions, it is necessary to allocate input VAT. If in the future an agreement on debt forgiveness is concluded between the organization and the founder who issued the loan, such an operation is recognized as a gratuitous transfer of property. The gratuitous transfer of property in accordance with the Tax Code of the Russian Federation is subject to income tax for the organization that received the property. But if the founder’s share is over 50%, such a transaction will not be taxed. In this case, interest on a forgiven loan is recognized as taxable income regardless of the share of the founder. Therefore, income tax must be charged on the interest amount.

Regarding the organization on the simplified tax system, there are three main ways to avoid tax risks when receiving a gratuitous loan from the founder:

1. constantly extend the repayment terms in the loan agreement;
2. register the receipt of funds as a gratuitous transfer of property. To do this, the authorized capital of the organization must consist of more than 50% of the donor’s contribution;
3. arrange a gratuitous transfer of property in order to increase the organization’s net assets.

How to get an interest-free loan

There are three ways to apply for assistance.

First- this is to conclude a loan agreement, then neither party will have any income or expenses. Provided that the agreement is interest-free and the money will be returned to the founder within the agreed period.

Second way: draw up a donation agreement. Then the money received can not be taken into account in taxable income under the simplified tax system only if the founder owns more than 50% of the authorized capital.

Third way: the founder can provide financial assistance in the form of a contribution to the property of the LLC. In this case, it is necessary to formalize the decision of the general meeting of the company’s participants, then all funds received can be withdrawn from taxation. You can choose any method, having previously assessed its pros and cons.

In case of a lack of funds or difficulties in obtaining a loan, the company can be saved by financial assistance from the founder. There are several options for executing such a transaction. To prevent the founder’s help from becoming unexpected financial losses for the company, we have prepared this material.

Option No. 1. Draw up a loan agreement

The most common option, when the founder contributes his money or property, is to draw up a loan agreement in writing (Clause 1 of Article 808 of the Civil Code of the Russian Federation). The agreement is considered concluded from the moment of transfer of money or other things under it. A mandatory condition of such an agreement will be the indication of the loan amount (clause 1 of Article 807 of the Civil Code of the Russian Federation). Without this condition, the agreement will be considered not concluded (Article 432 of the Civil Code of the Russian Federation).

In addition, the contract must specify the period and procedure for repaying the loan.

Also, when accepting help from the founder, you can stipulate that the loan is interest-free (Articles 808 and 809 of the Civil Code of the Russian Federation). If this condition is not present, the loan is considered to have interest by default. This means that in the future you will have to include these costs in expenses under the simplified tax system. An example of drawing up a loan agreement is shown in Fig. 1.

A loan agreement can be concluded for a fairly long period; this is not limited by law. If the deadline for returning the money has come, but there is nothing to return, then you can extend the contract.

Property or funds received under a loan agreement are not taken into account in income under the simplified system (subclause 1, clause 1.1, article 346.15 and subclause 10, clause 1, article 251 of the Tax Code of the Russian Federation). Therefore, there is no need to reflect the amounts received in the Income and Expense Book. There will also be no expenses when repaying the debt, since there is no such type of expense in the closed list of expenses taken into account under the simplified tax system (clause 1 of Article 346.16 of the Tax Code of the Russian Federation).

Option No. 2 Conclude a gift agreement

Another option to get help from the founder is to draw up a gift agreement with him. Since the donor is an individual, the agreement can be concluded orally, but for accounting purposes it is better if it is a written document (clause 2 of Article 574 and 575 of the Civil Code of the Russian Federation).

Let us note that in everyday life such an operation is often called not a gift, but the provision of financial assistance. You can call the contract exactly that, but all the accounting rules that apply to gift transactions will apply to it. Because the economic meaning is the same. And civil law provides for freedom of contract. That is, the parties can enter into any transactions, both provided for and not provided for by specific laws. This is stated in paragraph 2 of Article 421 of the Civil Code of the Russian Federation.

A sample donation agreement (financial assistance) is shown in Fig. 2.

If the founder owns more than 50% of the authorized capital of the enterprise, the gift received from him does not need to be included in taxable income (clause 1.1 of Article 346.15 and subclause 11 of clause 1 of Article 251 of the Tax Code of the Russian Federation). Moreover, if we are not talking about money, but about some specific property, it cannot be transferred to third parties within a year. Otherwise, its market value will have to be included in taxable income.

Figure 2. Fragment of the agreement on the provision of financial assistance by the founder

Option No. 3 The founder makes a contribution to the organization’s property, increasing net assets

If necessary, you can formalize the founder’s assistance as an additional contribution to the company’s property (Clause 1, Article 27 of the Federal Law of 02/08/98 No. 14-FZ “On Limited Liability Companies”). LLC participants can make contributions at any time if such a possibility is provided for by the charter. However, first it is necessary to formalize the decision of the general meeting of LLC participants. This decision must be recorded in the minutes of the general meeting. A sample protocol is shown in Fig. 3. Please note that the contribution must be made not by one person, but by all participants in proportion to their shares. Accordingly, if there are several founders, everyone will have to transfer funds. And if there is only one founder, he decides how much to contribute. If the charter of the organization does not provide for the obligation of the founders to make a contribution to the property of the limited liability company, then it will not be possible to use this method of “financial injections” until the corresponding changes are made to the charter.

Tax accounting of the contribution does not depend on the share of the founder who contributed the money or property. This is clearly stated in subclause 3.4 of clause 1 of Article 251 of the Tax Code of the Russian Federation. And this is a definite plus - all funds received are removed from taxation. The Ministry of Finance of Russia adheres to the same opinion in letters dated April 20, 2011 No. 03-03-06/1/257 and dated March 21, 2011 No. 03-03-06/1/160.

Figure 3. Sample minutes of the general meeting of LLC participants on the provision of financial assistance in the form of a contribution to the property of the LLC

Why is the situation when each of the two founders owns 50% of the authorized capital unfavorable?

If a business was founded by two partners, they often have the same, equal shares of the authorized capital - 50% each. Everything seems to be beautiful and honest. However, from an accounting point of view, it is better if one founder has at least 51% of the authorized capital, and the other, respectively, 49%. Then the former will be able to provide his company with financial assistance, which is exempt from taxation.

Indeed, according to subparagraph 11 of paragraph 1 of Article 251 of the Tax Code of the Russian Federation, in order for funds received free of charge not to be included in taxable income, they must be transferred by the founder who owns more than 50% of the authorized capital. This means that his share should be at least 51%. If the authorized capital is divided equally between the founders, financial assistance from any of them will be subject to taxes.

If the founder’s share in the authorized capital does not exceed 50%, the property or money received from him must immediately be included in non-operating income. This follows from paragraph 1 of Article 346.15 and paragraph 8 of Article 250 of the Tax Code of the Russian Federation.

When the loan is repaid, the founder does not receive income

When the founder is repaid the loan, he does not receive any economic benefit. After all, he is returned the amount that he gave earlier. Consequently, when the borrowed funds are returned under an interest-free loan agreement, the founder does not have any income and there is no obligation to pay personal income tax (letter of the Federal Tax Service of Russia for Moscow dated September 30, 2009 No. 20-14/3/101546). But if the loan agreement provides for the payment of interest, then the founder must pay personal income tax on the amount of interest received. Moreover, the obligation to withhold them arises from the tax agent - the organization that received borrowed money and pays interest (clause 1 of Article 209 and clause 1 of Article 226 of the Tax Code of the Russian Federation).

However, if the loan is not repaid within the stipulated time frame, taxable income may arise. The fact is that paragraph 18 of Article 250 of the Tax Code of the Russian Federation lists among non-operating income accounts payable written off due to the expiration of the limitation period or for other reasons. And according to paragraph 1 of Article 346.15 of the Tax Code of the Russian Federation, non-operating income “simplified” must be reflected in the tax base.

Let us recall that in accordance with the provisions of Article 196 of the Civil Code of the Russian Federation, the general limitation period is three years. And for obligations with a certain period of fulfillment, it begins after the period ends (clause 2 of Article 200 of the Civil Code of the Russian Federation). That is, if according to the agreement you must repay the debt on July 10, the statute of limitations will begin counting on July 11. Thus, if after three years the loan is not repaid, its amount will have to be included in non-operating income taken into account under the simplified system. If the loan agreement is interest-bearing, then the interest paid can be taken into account in the expenses of the “simplified loan”, however, within the limits of the norms (subclause 9, clause 1 and clause 2, article 346.16 and clauses 1 and 1.1, article 269 of the Tax Code of the Russian Federation).

Companies are created to make a profit. First of all, business owners and founders are interested in this. In order not to increase the authorized capital, they often resort to financial assistance through interest-free loans. In this article we will tell you how to properly apply for an interest-free loan from the founder without tax consequences in 2018.

In this article:

As a rule, if we are dealing with an LLC, the authorized capital is always assigned to a minimum. In 2018, this is still 10,000 rubles. But when a company faces difficulties, the founders do not like to increase the authorized capital. And there are not many ways to help a company financially. One of the most beloved by all founders is an interest-free company loan.

Loan from the founder in 2018: tax consequences

Generally, any proceeds must be taxed. First, let's look at it from the company's point of view. She received money into her account, which means it could be subject to income tax. But in our case they were listed as a loan and without interest. It would seem that we see this as a benefit for the company, but Article 25 of the Tax Code does not regulate the taxation of interest-free loans. Therefore, there will be no income tax in this situation.

Now let's look at the situation from the founder's point of view. He could have set interest and received it as income, but he deliberately refused to do so. In this case, such a decision can be interpreted as lost profits. The Ministry of Finance believes that a loan from the founder should be subject to taxation. This means that it is necessary to calculate the interest and pay personal income tax on it (letter dated May 25, 2015 No. 03-01-18/29936).

But this decision does not apply every time, but only if a controlled transaction was concluded between related parties. The founder takes risks if the following conditions are simultaneously met:

• the founder's share in the company is more than 25 percent,
• income from transactions between the company and the founder during the year exceeded 1 billion rubles.
• In other cases, a loan from the founder of his company without interest is not subject to taxation.

Interest-free loan from the founder without tax consequences in 2018

There are several conditions under which the founder gives financial assistance (in this case, an interest-free loan) to his organization and tax consequences do not arise. Here they are:

• The loan agreement must indicate that it is interest-free;
• The founder is an individual;
• The founder-lender has more than 50 percent of the share in the company.

If, for example, there are several founders in a company, then they can divide the shares equally. But for financing purposes, it is more convenient for one of them to have an ownership share of more than 50 percent. In this case, the condition must be met that the founder is an individual. Then he will be able to forgive the return of the interest-free loan. In this case, the company will not have taxable income.

be careful

Initially, the loan is not considered perpetual. The company cannot stipulate this in the contract. To forgive a debt, the founder either unilaterally writes a refusal to return the amount, or an agreement is drawn up between the parties in the absence of claims. From the moment the document is signed, the company’s obligations to the founder cease. We remind you that if the lender has less than 50 percent of the share in the company, then when the debt is forgiven, the company will receive non-operating income.

The founder does not generate income at the time of repayment of the interest-free loan. But if the company received an interest-bearing loan from the founder, there will be tax consequences in 2018. The founder will have to pay 13% personal income tax on the interest received.

Loan from the founder: registration

An interest-free loan can be issued at any time and in absolutely any amount. This is not specified anywhere. You can even give it away not in money, but in raw materials or building materials. In this case, you will also have to return similar materials so that there is no recognition of the sale.

It is necessary to conclude an agreement. If the receipt of money from the founder is confirmed only by payment documents, the tax office may recognize income. There will be tax consequences if the loan agreement with the founder does not state that the loan is interest-free. Without this phrase, it automatically becomes a regular interest-bearing loan. And the rate is recognized as the key rate at the time when the company must repay the debt.

An interest-free loan agreement cannot be made indefinite. But the founder can each time draw up a document in which he extends the loan repayment period.

Loan services are relevant among citizens of the Russian Federation. In accordance with established standards, not only banking institutions have the right to provide credit services; the founder of the organization also has the opportunity to provide financial assistance to an employee.

What are the features of a loan from the founder and what tax consequences will the participants in the transaction face?

Normative base

A loan is a transfer from a lender to a borrower of funds or property with the condition of repayment.

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The Civil Code does not contain any restrictions regarding the issuance of borrowed funds by the founder to his employees. Accordingly, the financial transaction is permitted at the legislative level.

A loan from the founder is accompanied by a number of features that are of interest to tax authorities.

Among them are the following:

• Loan size. If a company lends an employee more than 600 thousand rubles, then, in accordance with established standards, the financial transaction is subject to the control of auditors.
• Loan type. The regulatory framework does not contain restrictions on the issuance of interest-free loans. The interest rate is not applied to the loan only if such a condition is specified in the agreement.

Note. Tax authorities scrutinize interest-free loans. They have the right to charge additional interest, arguing that a commercial organization should make a profit from transactions.

• Form of agreement. The Tax Code contains provisions that oblige parties to a transaction to enter into a loan agreement only in writing, otherwise it has no legal force.

Registration of the contract

The parties to the transaction must fix the terms of the loan in a written agreement; established norms do not provide for other forms of agreement. The agreement comes into force only after the loan funds are transferred to the borrower.

The agreement must contain fundamentally important lending conditions. Among them are the following:

• lending terms - the loan can be fixed, or it can be indefinite (loan funds are returned only when the need arises from the lender);
• loan amount - legislative norms do not limit the parties to the transaction when determining the loan amount; it is established at the discretion of the parties to the agreement;
• type of loan - the loan agreement must contain information that the loan is interest-free; in the absence of a condition, the borrower will automatically be charged an interest rate;
• procedure for debt repayment - in this case, we are talking, for example, about monthly debt repayment and other conditions stipulated by the contract;
• lending purposes - if the founder provides a targeted loan, this condition must be specified in the agreement; it affects the taxation procedure for the borrower’s material benefits.

Video: Tax schemes

Tax consequences of an interest-free loan from the founder in 2019

Tax services carefully check the legality of financial transactions carried out by citizens of the Russian Federation. Participants in a loan agreement need to familiarize themselves with the specifics of taxation and weigh the potential risks.

With VAT

When talking about tax consequences in relation to VAT, you need to pay attention to the form of the loan. If it was issued in a non-monetary form, then the lender must independently pay the VAT tax.

In accordance with established standards, financial transactions for issuing loans in cash are not subject to VAT. This is due to the fact that the organization, by providing an interest-free loan, does not receive a profit in the form of an interest rate, and accordingly there is no fact of receiving income.

Note. In cases where the non-taxable amount exceeds 5% of the organization's total expenses, input VAT must be allocated.

If, in the future, an agreement on debt forgiveness is signed between the parties to the transaction, the financial transaction will be recognized as a gratuitous transfer of funds to the employee. In this case, the Tax Code of the Russian Federation obliges the borrower to pay income tax.

With simplified tax system

Under the simplified tax system, the taxation procedure is identical to VAT. Accordingly, borrowings made to an employee are not taxable as a lender expense.

When repaying an interest-free loan, the founder also does not generate income, which eliminates the tax accounting obligation.

Only interest-bearing loans are subject to taxation, since the lender makes a profit by paying the interest rate.

Insurance premiums

When receiving an interest-free loan, the material benefit that arises for the employee does not relate to the payments transferred in favor of the borrower within the framework of the employment relationship. Accordingly, loan funds are not subject to taxes on insurance premiums.

For personal income tax

If a loan from the founder was issued to an employee of the organization from the second party to the transaction, in accordance with established standards, a material benefit arises due to savings on interest.

If the borrowed funds were received in rubles, the amount of material benefit must be calculated on the basis of 2/3 of the refinancing rate established by the Central Bank of the Russian Federation at the time of actual receipt of profit.

Note. The moment of actual receipt of profit in the form of material benefits from the interest rate is usually considered to be the last day of each month during the term of the loan agreement.

When providing an employee with an interest-free loan, the creditor organization acts as a tax agent. The calculation of the tax amount must be carried out by the tax agent, taking into account the increase in material benefits for each month.

Tax agents must withhold a specified amount of tax from the taxpayer’s income, that is, from the employee’s salary at the time of actual payment.

note. The amount withheld for tax purposes from an employee cannot exceed 50% of the person's salary or other income.

If the employee was previously provided with a tax deduction, his profit received in the form of a material benefit is taxed at a rate of 35%. An identical rate applies if borrowed funds were received for the purchase or construction of residential space.

Note. In 2019, adjustments were made to the procedure for calculating material benefits. Citizens have a specialized online calculator at their disposal; they just need to enter the loan terms and receive an automatic calculation.

Exceptions

The established norms of the Tax Code of the Russian Federation provide for cases when savings on interest rates are not taxed.

The following cases are exceptions:

• loan funds are used to purchase residential space;
• the loan is aimed at housing construction;
• The funds were used to purchase plots for individual housing construction.

Late repayment of debt

By signing a loan agreement, the borrower undertakes to repay the borrowed funds in a timely manner. If the employee violates the deadline for repaying the loan, the founder has the right to demand from him additional interest for the delay.

The creditor, when collecting penalties for late payment of the debt, must include them in unrealized income at the time they are recognized by the borrower or at the time of the court decision (in case of litigation).

The moment of recognition of penalties by the borrower is considered to be the date of signing an agreement to agree to the imposed fine. The founder must include the penalty in taxable income after receiving the funds.

Note. In the event that there is no recognition of penalties by the borrower or the judicial authorities, the lender does not generate taxable income.

Debt forgiveness

As practice has shown, the creditor often decides to forgive the debt to the employee. In this case, it is necessary to take into account the taxation features of the financial transaction.

When forgiving debt, NFL that was accrued as a material benefit from interest rate savings must be taken into account. The tax agent is obliged to continue calculating it until the entire amount of credit funds has been exhausted.

Moreover, the forgiven debt is also subject to taxation, but at a rate of 13%. The tax must be calculated at the time of notification of debt forgiveness or at the time of signing an agreement on the donation of loan funds.