It is an illegal act and constitutes a crime of defrauding loans. The crime of defrauding loans refers to the act of obtaining loans from banks or other financial institutions by deception, which causes heavy losses to banks or other financial institutions or has other serious circumstances. This kind of loan seems to be just cleverness, but in fact it involves a criminal crime-the crime of defrauding loans. Not all fictional uses can be considered as constituting this crime. If the fabricated loan purpose does not change the nature of the risk and does not affect the overall benefit of the loan use, it should not be considered as a crime of defrauding loans. Only when the fictitious loan purpose leads to an increase in risk or seriously affects the overall benefit of the loan can it be considered as constituting this crime.
2. Is it feasible for the subsidiary to deduct the loan interest from the parent company before tax?
Interest can be used to calculate, but income and expenditure can be calculated by internal transactions, which can not only clearly calculate their respective benefits, but also avoid taxes reasonably.
3. Is it legal for a subsidiary to borrow money from the parent company?
According to the law, the parent company and the subsidiary company are independent legal entities, have their own independent property, and can independently bear civil legal liabilities. Therefore, both parties can make formal loans according to law.
4. Is it legal for the parent company to borrow money from its subsidiaries? What is the legal basis?
Article 73 of the General Principles of Loans: "If an enterprise borrows loans without authorization or in disguised form, the People's Bank of China will impose a fine of/kloc-0 to 5 times the illegal income on the lender and ban it." According to this regulation, it can basically be concluded that lending between enterprises is illegal (although there are also opposing views), and the consequence is a fine, but if there is no illegal income, it should not be fined according to the general rules.
But is the contract invalid? According to the contract law, I think it should be effective. However, Article 4 of the Supreme People's Answers on Several Issues Concerning the Trial of Joint Venture Contract Cases and the Reply of the Supreme People on what to do if the borrower fails to repay the loan within the time limit have stipulated that the loan contract between enterprises violates China's financial regulations and is an invalid contract. Although these provisions were promulgated before the entry into force of the Contract Law, they may still play a certain role in practice. Therefore, from a conservative point of view, non-wholly-owned subsidiaries in the group should be advised not to borrow as much as possible, because once a fine occurs, it is difficult to control remedial measures. For subsidiaries that are completely controlled by investment, they can balance their own risks and operate. As long as it is not punished by the competent authorities, the risk can be controlled.