When enterprises are in urgent need of funds in the course of operation, there is no hope of financing, and they can't get loans from banks smoothly, many bosses or shareholders of enterprises borrow from financial institutions in the form of individuals, and then use them for business operation, and the loan interest is borne by enterprises.
Although this kind of operation has solved the urgent needs of enterprises, it seems that shareholders have neither lost money nor made profits through interest. In fact, shareholders' personal loans are used for business operations. Can the interest expenses borne by the enterprise be deducted before tax? Do individual shareholders really have to pay taxes?
I'll give you a case to illustrate:
situation
Company A is a limited liability company in a certain city. Due to the epidemic situation, the company's capital chain has problems, and a large amount of liquidity is urgently needed to alleviate the company's operating problems. Company A can't get a loan from a financial institution.
In April 2020, Mr. Li, a shareholder of the company, obtained a loan of 5 million yuan with an annual interest rate of 6.5% from the bank in his own name, with a term of 1 year. After Mr. Li obtained the loan, he gave it to Company A for use, and the interest rate of similar loans in the same period was 6.5%.
Question 1
Can the interest expenses paid by Mr. Li to the bank be deducted before the enterprise income tax?
Can't!
Reason: Mr. Li borrowed money from the bank in his own name, and his interest expenses cannot be deducted as company expenses.
Question 2
When company A pays interest, can it be recorded without invoicing? If not, do you still need shareholders?
No invoice can not be deducted before tax, and shareholders need to go to the tax bureau or provide a receipt for payment.
The specific provisions are as follows:
Enterprises accept services provided by individuals:
If the asylum seeker is an individual engaged in small and sporadic business, his expenses can be deducted from receipts and internal vouchers as pre-tax vouchers; (Remarks: The receipt voucher should include the payee's name, personal name and ID number, expenditure items, receipt amount and other related information. )
If the other party is an individual who is not engaged in small-scale sporadic business, it shall obtain invoices (including invoices issued by tax authorities according to regulations) in accordance with the relevant provisions of the Measures for the Administration of Invoices in People's Republic of China (PRC), and use the invoices as pre-tax deduction vouchers.
Question 3
Suppose shareholders charge interest to Company A according to the bank loan interest rate. What taxes should be paid on the interest for one year?
Shareholder Mr. Li shall pay value-added tax, urban construction tax, additional tax and personal income tax on the interest income collected.
The one-year tax-free interest income collected by Mr. Li = 5006.5% (11%) = 32.18 (ten thousand yuan).
(1) VAT 5006.5% (11%)1%0.32 (ten thousand yuan)
Reminder: From March 1 to February 1 in 2020, the personal 3% levy rate can be reduced 1% during the epidemic period.
(2) Urban construction and additional 0.32(7%-3%-2%)/ 10000384 (Yuan)
(3) in terms of personal income tax
According to the current individual income tax law, if a loan is obtained in the name of an individual, the money will be used for the operation of the enterprise, and the enterprise will bear the loan interest. Personal income tax shall be levied at a reduced rate of 20% on the loan interest borne by enterprises on behalf of individuals and the projects obtained by individuals.
Personal income tax [5006.5% (11%)] 20% 6.44 (ten thousand yuan).
Question 4
If shareholders lend money to the enterprise for free, related tax-related issues
(1) VAT
Regarding the provision of services free of charge, Article 14 of the annex (Caishui [2016] No.36) stipulates: (1) Units or individual industrial and commercial households provide services free of charge to other units or individuals, except public welfare undertakings or the public.
Here only refers to the services provided by "units or individual industrial and commercial households" free of charge, which need to be regarded as closed for sale, excluding the services provided by individuals to other units or individuals free of charge.
Therefore, free loans from individuals to enterprises do not involve value-added tax.
(2) Personal income tax
The Individual Income Tax Law of People's Republic of China (PRC) and its implementing regulations have added anti-tax avoidance clauses. If the business dealings between individuals and their related parties do not conform to the principle of independent transactions, the tax authorities have the right to make tax adjustments in a reasonable way without justifiable reasons. If it is necessary to pay back taxes, they should pay back taxes and charge interest according to law.
Therefore, if individual shareholders lend their funds to their affiliated enterprises for free, the tax authorities will generally not recognize them, and there is a risk that the competent tax authorities will pay individual income tax according to the interest paid by financial institutions during the same period.
Relevant policies
1. How to deduct the interest expenses of the enterprise's borrowing from shareholders or other natural persons related to the enterprise before tax?
According to (Guo [2009] No.777), the interest expenses incurred by an enterprise in borrowing from shareholders or other natural persons related to the enterprise shall be based on the conditions stipulated in Article 46 of the Enterprise Income Tax Law of People's Republic of China (PRC) (hereinafter referred to as the Tax Law) and (Cai Shui [2008] No.65438 +02 1).
2. How to deduct the loan interest expenses of internal employees or other personnel (non-investment and non-association) before tax?
Where an enterprise borrows money from internal employees or other personnel other than those specified in Article 1 and the following conditions are met at the same time, and the interest expense does not exceed the amount calculated according to the similar loan interest rate of financial enterprises in the same period, it shall be deducted in accordance with the provisions of Article 8 of the Tax Law and Article 27 of the Regulations for the Implementation of the Tax Law.
(1) The loan between an enterprise and an individual is true, lawful and effective, and there is no illegal fund-raising purpose or other illegal acts;
(two) enterprises and individuals signed a loan contract.
After shareholders borrow money in the name of the company, the loan is used for the operation of the company. Can shareholders withdraw their shares?
There is no direct connection between the withdrawal and the company loan. As long as all shareholders agree on the height of the hole. Shareholders may apply to Lu Chansan for early withdrawal of shares. The loan is handled by the company and the legal person bears the responsibility. If you sign a personal guarantee in refinancing, you must bear the guarantee responsibility regardless of whether you withdraw your shares.
What account books are registered for borrowing money from shareholders for production and operation?
Borrowing from shareholders for production and operation needs to be registered in the company's "accounts payable" account book. Accounts payable refers to the accounts payable that enterprises should pay to suppliers or creditors. In this case, the shareholder is the creditor of the enterprise, so borrowing from the shareholder needs to be registered in the accounts payable account book. The specific operation steps are as follows:
1. First, open an account payable-shareholder loan in accounting software or manual ledger.
2. When borrowing from shareholders occurs, the amount of the loan should be recorded in the debit of "accounts payable-shareholder loan", and the same amount should be recorded in the credit of assets such as bank deposits or cash to reflect the receipt of funds by the enterprise.
3. When making repayment, the repayment amount needs to be debited to assets such as bank deposits or cash, reflecting that the enterprise has repaid the loan. When the balance is the same, the same amount should be credited to the credit of accounts payable-shareholder loan, indicating that the enterprise has paid off the shareholder loan.
It should be noted that borrowing from shareholders is an internal loan of an enterprise, which needs to be managed and handled in a standardized way in terms of law, taxation and finance. Enterprises should formulate relevant internal loan agreements to ensure that the loan amount, interest rate, repayment period and other contents are clearly stated and agreed. In addition, enterprises need to disclose loan information to shareholders in time to prevent possible conflicts of interest and risks.
Do shareholders lend money to the company for free to pay taxes?
Legal subjectivity:
No, shareholders don't have to pay taxes when they lend money to the company. Shareholders of a company may borrow money in their own names for the operation of the company. Borrowing by shareholders of a company in their own name for the company's operation is a company loan and can be recorded as a company loan. According to the Company Law, the company enjoys all legal person property rights formed by shareholders' investment. After the shareholders invest the relevant property in the company by way of capital contribution, the ownership of the property is transferred and becomes the property of the company, and the company enjoys the right to possess, use, benefit and dispose of its property according to law. Provisions of the Supreme People's Government on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases Article 23 Shareholders: If the legal representative or person-in-charge of an enterprise signs a private lending contract with the lender in the name of the enterprise, and the lender, the enterprise or its shareholders can falsely prove that the borrowed money belongs to the legal representative or person-in-charge of the enterprise for personal use, the lender requests that the legal representative or person-in-charge of the enterprise be listed as the defendant Xiao Qi or the third party, and the people's court shall allow it.
Which companies can shareholder loans be used for?
Travel expenses for business trips and purchasing daily necessities for enterprises.
1. Travel expenses. Reimbursement of travel expenses can be paid by shareholders' loans.
2, for enterprise daily necessities procurement. Enterprises can use shareholders' loans to buy commodities used in daily life.
This is the end of the introduction of the Company's Operating Shareholder Loan Agreement and the Company's Operating Shareholder Loan Agreement. I wonder if you found the information you need from it?