Personal income tax taxation of interest on loans provided to the company, and not received from the company

Often, employees (or other citizens of the Russian Federation, or stateless persons, foreigners) provide an interest-bearing loan to the organization. In this case, the persons who provided the loan receive income in the form of interest on the loan.

In this article, we will consider the procedure for determining the tax base for personal income tax in relation to the taxpayer’s income received in the form of interest on a loan.

First of all, we note that borrowing relationships are formalized by a loan agreement.

The civil legal basis of the loan agreement is established by paragraph 1 of Chapter 42 “Loan and Credit” of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation).

According to paragraph 1 of Article 807 of the Civil Code of the Russian Federation, under a loan agreement, one party (the lender) transfers into the ownership of the other party (borrower) money or other things determined by generic characteristics, and the borrower undertakes to return to the lender the same amount of money (loan amount) or an equal amount of other received them things of the same kind and quality. The loan agreement is considered concluded from the moment the money or other things are transferred.

Based on the requirements of paragraph 1 of Article 161 and paragraph 1 of Article 808 of the Civil Code of the Russian Federation, if one of the parties to the loan agreement is a legal entity, then the loan agreement must be concluded in writing.

By virtue of paragraph 1 of Article 809 of the Civil Code of the Russian Federation, as a general rule, the lender has the right to receive interest from the borrower on the loan amount in the amount and in the manner determined by the agreement. If there is no provision in the agreement on the amount of interest, their amount is determined by the bank interest rate (refinancing rate) existing at the lender’s place of residence on the day the borrower pays the debt amount or its corresponding part.

Interest under the loan agreement can be paid in any manner agreed upon by the parties. If such a procedure is not agreed upon in advance, then interest on the basis of paragraph 2 of Article 809 of the Civil Code of the Russian Federation is paid monthly until the day the loan amount is repaid.

In accordance with paragraph 1 of Article 810 of the Civil Code of the Russian Federation, the borrower is obliged to return to the lender the received loan amount on time and in the manner prescribed by the loan agreement.

In cases where the repayment period is not established by the agreement or is determined by the moment of demand, the loan amount must be repaid by the borrower within thirty days from the date the lender submits a request for this, unless otherwise provided by the agreement.

By virtue of paragraph 2 of Article 810 of the Civil Code of the Russian Federation, the amount of a loan provided with interest can be repaid ahead of schedule with the consent of the lender.

In case of early repayment of the loan amount provided at interest in accordance with paragraph 2 of Article 810 of the Civil Code of the Russian Federation, the lender has the right to receive from the borrower interest under the loan agreement, accrued up to and including the day of repayment of the loan amount in full or part thereof (paragraph 4 of Article 809 of the Civil Code of the Russian Federation ).

As a general rule, the loan amount is considered repaid at the moment it is transferred to the lender or the corresponding funds are credited to his bank account (clause 3 of Article 810 of the Civil Code of the Russian Federation).

Personal income tax

An individual who has provided a loan to an organization receives income in the form of interest on the loan. This income is subject to taxation under the personal income tax (hereinafter - personal income tax) (subparagraph 1 of paragraph 1 of article 208 of the Tax Code of the Russian Federation (hereinafter - the Tax Code of the Russian Federation), article 209 of the Tax Code of the Russian Federation).

Subclause 1 of clause 1 of Article 223 of the Tax Code of the Russian Federation determines that the date of actual receipt of income in the form of interest is considered the day of payment of such income to the individual who issued the loan to the organization. In this case, the payment of income should be understood not only as the issuance of cash, but also as its transfer to the current account of an individual or, on his behalf, to the accounts of third parties.

On interest on a loan provided by a resident of the Russian Federation, personal income tax is withheld at a rate of 13% (clause 1 of Article 224 of the Tax Code of the Russian Federation), and on interest on a loan paid to a non-resident, personal income tax is withheld at a rate of 30% (clause 3 of Article 224 of the Tax Code of the Russian Federation).

According to Article 226 of the Tax Code of the Russian Federation, Russian organizations from which or as a result of relations with which an individual recognized as a personal income tax payer received income are required to calculate, withhold from the taxpayer and pay the amount of tax. The exception is income for which the calculation of amounts and payment of tax are carried out in accordance with Articles 214.3, 214.4, 214.5, 214.6, 226.1, 227 and 228 of the Tax Code of the Russian Federation.

Consequently, an organization that has received a loan from an individual (including its employee) and pays him interest is obliged, as a tax agent, to calculate and withhold from the lender the amount of personal income tax from this interest and pay it to the budget.

By virtue of paragraph 4 of Article 226 of the Tax Code of the Russian Federation, personal income tax is withheld from any funds paid by the tax agent to the taxpayer upon actual payment of these funds. In this case, the withheld tax amount cannot exceed 50% of the payment amount.

If it is impossible to withhold the calculated amount of personal income tax, the tax agent is obliged, within one month from the date of the end of the tax period in which the relevant circumstances arose, to notify in writing the taxpayer and the tax authority at the place of his registration about the impossibility of withholding the tax and the amount of tax (clause 5 of Article 226 of the Tax Code of the Russian Federation) .

In such a situation, the taxpayer calculates and pays personal income tax independently in the manner prescribed by Article 228 of the Tax Code of the Russian Federation.

Clause 2 of Article 230 of the Tax Code of the Russian Federation provides that, as a general rule, tax agents submit to the tax authority at the place of their registration information on the income of individuals for the expired tax period and the amounts accrued, withheld and transferred to the budget system of the Russian Federation for this tax period of taxes annually no later than April 1 of the year following the expired tax period, in the form, formats and in the manner approved by the federal executive body authorized for control and supervision in the field of taxes and fees.

The specified information is submitted by tax agents in electronic form via telecommunication channels or on electronic media. Note that if the number of individuals who received income in the tax period is up to 10 people, tax agents can submit such information on paper.

Tax agents issue to individuals, upon their applications, certificates of income received by individuals and amounts of tax withheld in a form approved by the federal executive body authorized for control and supervision in the field of taxes and fees (clause 3 of Article 230 of the Tax Code of the Russian Federation).

Let us recall that the form of certificate No. 2-NDFL was approved by Order of the Federal Tax Service of Russia dated November 17, 2010 No. ММВ-7-3/611@ "On approval of the form of information on the income of individuals and recommendations for filling it out, the format of information on the income of individuals in electronic form, reference books."

Note!

According to Article 123 of the Tax Code of the Russian Federation, if a tax agent fails to fulfill obligations related to the withholding and (or) transfer of personal income tax, penalties in the amount of 20% of the amount subject to withholding and (or) transfer may be applied to him.

When withholding personal income tax, you should remember that an organization (borrower) can provide its employee (lender) with standard tax deductions provided for in Article 218 of the Tax Code of the Russian Federation. This deduction is provided in respect of any taxpayer income subject to personal income tax at a rate of 13% (clause 3 of Article 210 of the Tax Code of the Russian Federation), which, in particular, includes interest on a loan.

The standard tax deduction, according to Article 218 of the Tax Code of the Russian Federation, is provided to certain categories of individuals. Moreover, standard tax deductions are actually divided into two categories, namely deductions:

– provided to the taxpayer himself;

– provided for the child (children) of the taxpayer, the so-called “children’s” deductions.

These tax deductions are fixed and applied monthly.

The standard tax deductions that the taxpayer himself has the right to use are deductions in the amount of 3,000 rubles and 500 rubles.

In addition to his own standard tax deductions, the taxpayer can take advantage of "children's" deductions. In accordance with subparagraph 4 of paragraph 1 of Article 218 of the Tax Code of the Russian Federation, such deductions apply to the parent, spouse of the parent, adoptive parent, guardian, trustee, adoptive parent, spouse of the adoptive parent who support the child, and are provided in the following amounts :

1,400 rubles – for the first child;

1,400 rubles – for the second child;

3,000 rubles – for the third and each subsequent child;

3,000 rubles - for each child if a child under the age of 18 is a disabled child, or a full-time student, graduate student, resident, intern, student under the age of 24, if he is a disabled person of group I or II.

The tax deduction is valid until the month in which the taxpayer’s income, calculated on an accrual basis from the beginning of the tax period (for which a tax rate of 13% is provided) by the tax agent providing this standard tax deduction, exceeded 280,000 rubles.

Starting from the month in which the specified income exceeded 280,000 rubles, the tax deduction provided for by subparagraph 4 of paragraph 1 of Article 218 of the Tax Code of the Russian Federation is not applied.

Let us note that the organization (borrower) does not have the right to provide standard tax deductions to employees (lenders) who are non-residents (clause 4 of Article 210 of the Tax Code of the Russian Federation).

Let's look at a specific example of the procedure for calculating personal income tax on interest on a loan provided by an employee - a resident of the Russian Federation - of his organization.

Example (numbers are conditional)

On January 13, 2015, the sole founder (who is also the general director) of LLC “A” provided his organization with a cash loan in the amount of 300,000 rubles. The specified loan was issued for 15 days at 15% per annum.

The interest amount is 1,849.32 rubles (300,000 rubles x 15% / 365 days x 15 days).

Let's assume that the general director's salary is 25,000 rubles. He is entitled to receive a standard child deduction in the amount of 1,400 rubles.

On January 27, 2015, the organization returned the amount of the loan to the employee and paid the accrued interest.

Personal income tax is withheld from the interest amount in the amount of: (1,849.32 rubles – 1,400 rubles) x 13% = 58.41 rubles.

The amount of personal income tax when paying wages for January will be 3,250 rubles (25,000 rubles + 1,849.32 rubles – 1,400 rubles) x 13% – 58.41 rubles.

Example (numbers are conditional)

One of the founders of LLC "A" is a citizen of Ukraine and works in the organization as a commercial director.

Let’s assume that on February 3, 2015, an employee provided the organization with a cash loan in the amount of 200,000 rubles. The loan was issued for 15 days at 15% per annum.

The interest amount is 1,232.88 rubles (200,000 rubles x 15% / 365 days x 15 days).

Let’s assume that an employee’s salary is 25,000 rubles.

Personal income tax is withheld from the interest amount in the amount of: 1,232.88 rubles x 30% = 369.87 rubles.

The employee was paid wages for the month of February on March 11. As of March 1, he does not have the status of a tax resident of the Russian Federation. When paying wages, tax is withheld in the amount of 7,500 rubles (25,000 rubles x 30%).

Borrowers often ask whether they need to pay personal income tax when repaying a loan. Legal entities, as a rule, do not have such questions - Art. 208 Tax Code clause 1. regulates the taxation of income of individual entrepreneurs and legal entities. Is there a similar rule of law for individuals?

Personal income tax under a loan agreement

Personal income tax accrual under a loan agreement occurs in cases where an individual or organization has received a profit that they can dispose of. This is specified in Article 210. According to Article 41, any economic benefit is considered income, including income of individuals in the form of interest on a loan. Therefore they are also taxed.

Personal income tax on an interest-free loan

When the lender receives from the borrower an amount equal to that specified in the loan agreement, no economic benefit arises. Therefore, there is no reason for taxation. In cases where an interest-free loan was provided by an organization, it must be taken into account that the recipient saves on interest, which is usually paid by citizens for bank loans. According to tax legislation, this savings is direct income from which personal income tax must be paid.

Are loans subject to personal income tax?

In some cases, loans are subject to personal income tax. For example, when a company allows the borrower to manage loan funds on better terms than in banks. This indicator is called the marginal rate and is calculated as 2/3 of the refinancing rate. If the loan rate is lower. than 2/3 of the refinancing rate of the Central Bank of the Russian Federation, the borrower must pay personal income tax on such material benefit. The same applies to interest-free loans from organizations.

To calculate the amount of material benefit, it is necessary to multiply the resulting marginal rate by the loan amount and by the ratio of the number of days of using the loan to the number of days in the current year. Personal income tax is paid on the resulting amount of material benefit.

Interest under a loan agreement with personal income tax

In cases where an employee takes out a loan from his company on favorable terms, the calculation of the material benefit and the amount required to pay in the form of personal income tax is calculated by the organization itself. The amount received is deducted from the employee's salary. All calculations are handled by the accounting department of the individual entrepreneur or legal entity that provided the loan.

Almost every company (IP) at certain stages of its activities needs additional cash injections. Perhaps they will be used to establish or develop a business, purchase expensive equipment, maintain and improve the financial condition of the enterprise, etc. At the same time, the sources of raising funds are different. The most commonplace of them is a bank loan. However, not only a credit institution, but also a private person (for example, a founder, director, employee or even a stranger) can borrow money under a loan agreement. Often such an agreement provides for the payment of interest to the “physicist” - the lender for the use of borrowed funds, as a result of which he receives taxable income. From this consultation you will learn how to reflect in 6-NDFL interest on loan. But first, a little background information.

Concept and general characteristics of a loan agreement

Borrowing relations are regulated by civil legislation (§ 1, Chapter 42 of the Civil Code of the Russian Federation). They are formalized, as a rule, by a loan agreement - a bilateral agreement between the lender and the borrower, according to which the first transfers ownership of the loan item (money or other things defined by generic characteristics), and the second undertakes to return an equivalent item (i.e., such a thing) within a specified period of time. the same amount of money or an equal amount of other things he received of the same kind and quality) (paragraph 1, clause 1, clause 1).

The agreement is recognized as real (i.e. concluded) from the moment of transfer to the borrower of money or other things that are the subject of the loan (clause 2, paragraph 2, clause 1).

The borrower and lender can be legal entities and individuals, as well as the state. In this case, the loan agreement is drawn up in writing if:

• one of the parties to the loan agreement is a legal entity or individual entrepreneur (clause 3, clause 1, clause 1, clause 1);
• An agreement is concluded between citizens for an amount exceeding 10 minimum wages (clause 1).

(Recall that in accordance with paragraph 2 of Article 5 of the Federal Law of June 19, 2000 No. 82-FZ, for calculating payments for civil obligations, the basic minimum wage amount of 100 rubles is used. This means that an individual draws up a transaction on paper with the amount loan 1000 rubles and above.)

By the way!
Failure to comply with the written form does not invalidate the loan agreement. True, in the event of a dispute, the parties will no longer be able to refer to witness testimony to confirm the transaction and its terms (clause 1). Although they have the right to present written and other evidence (for example, a receipt from the borrower confirming receipt of money (clause 2)).

The subject of a loan agreement is most often cash (cash and non-cash), less often - things defined by generic characteristics (goods, raw materials, materials, securities, etc.). A generic sign means that things cannot be individualized, that is, they cannot be separated from the general mass of things of the same kind (for example, grain, flour, gasoline, etc.). If this can be done through individual characteristics, then things are recognized as individually defined (for example, these are land plots, buildings, structures, vehicles, personalized securities, etc.). They cannot be transferred under the loan agreement!

For the use of borrowed funds, the borrower usually pays interest to the lender. Although the contract may stipulate the opposite, i.e. the loan will be interest-free (clause 1).

Note!
A loan agreement is considered compensated (that is, issued with interest), even if it does not contain a condition on the amount and procedure for paying interest. An exception to this rule is (clause 2):

An agreement that is concluded between citizens for an amount of up to 50 minimum wages (5,000 rubles) and is not related to the entrepreneurial activity of at least one of the parties;
- an agreement under which not money, but things are transferred.

In these cases, the loan is assumed to be gratuitous (interest-free), even if this is not directly “said” in the text of the agreement. At the same time, this does not prevent the contracting parties from fixing the interest clause.

The procedure and timing of loan repayment are determined by the agreement (clause 1). If the parties do not agree on this condition, then the loan agreement is considered unlimited. Under an open-ended agreement, the lender has the right to demand repayment of the debt at any time, and the borrower, in turn, is obliged to repay it within 30 days from the date of presentation of the corresponding demand.

Notice!
The borrower can repay the interest-free loan early (unless otherwise provided by the agreement). But early repayment of an interest-bearing loan is allowed only with the consent of the lender (clause 2).

Cash settlement limit under the loan agreement

If the subject of the loan agreement is cash, then the borrower and the lender must comply with the cash payment limit, which is equal to 100,000 rubles. in accordance with clause 6 of Bank of Russia Instructions No. 3073-U dated October 7, 2013 (hereinafter referred to as Instructions No. 3073-U). That is, this is the maximum amount of cash that the parties to the transaction can transfer to each other.

This limit applies to settlements under one agreement (clause 2 of Instructions No. 3073-U):

• between organizations;
• between the organization and the individual entrepreneur;
• between IP and IP.

Note!
The cash settlement limit does not apply to settlements under a loan agreement with an individual who is not engaged in entrepreneurial activities (clause 5 of Instructions No. 3073-U). Therefore, an organization (IP) can borrow any amount of cash from its employee (or any other citizen), and vice versa.

For violating (exceeding) the cash payment limit, perpetrators may be fined according to:

• legal entity - in the amount of 40,000 rubles. up to 50,000 rubles;
• officials - in the amount of 4,000 rubles. up to 5,000 rub.

Personal income tax on interest paid to an individual under a loan agreement

The interest that an organization / individual entrepreneur (borrower) pays to an individual (lender) under a paid loan agreement is the latter’s income, which is subject to personal income tax at the rate (clause 1, clause 1, clause 1, clause 1):

• 13% - if the lender is a resident of the Russian Federation (clause 1);
• 30% - if the lender is not a resident of the Russian Federation (clause 3).

Moreover, in relation to such income, the borrower is recognized as a tax agent (clause 1 and clause 2). That is, he must deduct from it and transfer it to the personal income tax budget.

By the way, an individual’s income, subject to personal income tax at a rate of 13% in accordance with clause 1 (including interest on loans), can be reduced by standard tax deductions and / or (clause 3, clause 1). Therefore, the lender (a resident of the Russian Federation) has every right to contact the borrower for deductions, and he, in turn, will have to provide them.

Date of actual receipt of income in the form of interest on the loan

For the purpose of calculating personal income tax, the date of actual receipt of income in the form of interest on the loan is determined:

• as the day of payment of such income to an individual - if interest is paid in cash (clause 1 clause 1);
• as the day of transfer of property to an individual - if interest is paid in kind (clause 2, clause 1).

The Russian Ministry of Finance also drew attention to this.

Remember!
The frequency of interest payments is established by the loan agreement. It can be daily, monthly, quarterly or some other. If there is not a word about this in the agreement, then interest must be paid every month until the day the loan amount is repaid (clause 2).

Date of calculation of personal income tax on income in the form of interest on a loan

If interest is paid in kind, then income tax is withheld from any funds of the “physicist”. In this case, the withheld amount of personal income tax cannot exceed 50% of the amount of paid cash income (paragraph 2, paragraph 4).

Deadline for payment of personal income tax on income in the form of interest on a loan

Personal income tax withheld from income in the form of interest on a loan is transferred to the budget no later than the next working day after payment of such income to an individual (paragraph 1, paragraph 6, paragraph 7, article 6.1 of the Tax Code of the Russian Federation).

If the “physical” lender receives interest in kind, then the deadline for paying the tax calculated on this interest will be the day following the day of withholding “non-monetary” personal income tax on cash income.

Interest on a loan agreement in 6-NDFL: example

Example. On November 30, 2017, Parus LLC received a cash loan from its sole founder (a resident of the Russian Federation) in the amount of RUB 1,000,000. at 15% per annum. The agreement does not provide for a change in the interest rate.

Payment of interest for the use of borrowed funds is made on the last day of each month. If this day is a non-working day, then the payment is postponed to the next working day.

Thus, the borrower company will pay interest to the founder - lender (see table below):

The organization did not make other payments and remunerations in favor of individuals during 2018.

Parus LLC reflected interest under a loan agreement in 6-NDFL for the first quarter of 2018, since the corresponding transactions affect precisely this reporting period.

6-NDFL for the first quarter of 2018

Section 1 of 6-NDFL calculation

Filled with a cumulative total from the beginning of 2018 (in our example, until the end of March 2018).

on line 010 - 13 /indicates the rate at which personal income tax is calculated and withheld from the income of individuals;

on line 020 - 49,315.06 / indicates the total amount of income received by individuals for the period January - March 2018 (including interest payments under the loan agreement);

on line 030 - 0 / indicates the amount of tax deductions provided to individuals for the period January - March 2018;

on line 040 - 6 411 / personal income tax is indicated, calculated from the income of individuals received by them for the period January - March 2018;

on line 060 - 1 / indicates the number of individuals who received income at all tax rates for the period January - March 2018;

on line 070 - 6 411 / indicates personal income tax withheld from the total amount of income paid to individuals at all tax rates for the period January - March 2018.

Section 2 of 6-NDFL calculation

Filled out only for the last 3 months of the reporting period (in our example, for January - March 2018).

Information on interest payments (for December 2017).

on line 100 - 01/09/2018 / the date of actual receipt of income is indicated; for loan interest - this is the day of their payment (clause 1 clause 1);

on line 110 - 01/09/2018 / the date of deduction of personal income tax from interest on the loan is indicated; coincides with the date of their payment (paragraph 1, paragraph 4);

on line 120 - 01/10/2018 / the deadline for the transfer of personal income tax is indicated; for interest on a loan - this is the day following the day of their payment (paragraph 1, paragraph 6);

Keep in mind!
Line 120 of Section 2 of Form 6-NDFL indicates the deadline for tax payment established by the Tax Code of the Russian Federation, and not the date of its actual transfer to the budget by the tax agent.

on line 130 - 12,739.72 / indicates the amount of interest paid to the individual under the loan agreement;

on line 140 - 1,656 / personal income tax withheld from interest paid to an individual under a loan agreement is indicated.

Information on interest payments for January 2018 (see above for explanation of lines).

on line 100 - 01/31/2018;

on line 110 - 01/31/2018;

on line 120 - 02/01/2018;

on line 130 - 12,739.72;

on line 140 - 1,656.

Information on interest payments for February 2018 (see above for explanation of lines).

on line 100 - 02/28/2018;

on line 110 - 02/28/2018;

on line 120 - 03/01/2018;

on line 130 - 11,506.85;

on line 140 - 1,496.

Note!
The interest payment transaction for March 2018 will not be included in section 2 of Form 6-NDFL for the first quarter of 2018. The tax agent will reflect it in the calculations for the first half of 2018, since the deadline for transferring tax on the specified income is in April.

See below for a completed sample calculation in Form 6-NDFL of Parus LLC for the first quarter of 2018, reflecting the interest paid to an individual under the loan agreement.

It is necessary to calculate income in the form of material benefits from savings on interest on loans on the last day of each month. For example, a loan was issued on January 15 and returned on March 23. Then the financial benefit will have to be calculated on January 31, February 28 (29) and March 31 (subclause 7, clause 1, article 223 of the Tax Code of the Russian Federation).

If a loan was issued to an individual (for example, an employee) by an organization, then it will be the organization that will report income in the form of financial benefits. Therefore, the organization will have to (Article 226 of the Tax Code of the Russian Federation):

• monthly calculate income in the form of financial benefits and personal income tax on it;
• withhold tax from immediate cash payments to an individual;
• transfer the withheld tax to the budget;
• At the end of the year, submit a 2-NDFL certificate to the individual.

If cash income is not paid to an individual and there is nothing to withhold tax from, then at the end of the year no later than March 1, you must inform the Federal Tax Service about the impossibility of withholding tax (clause 5 of Article 226 of the Tax Code of the Russian Federation).

Interest-free loan: material benefits and personal income tax

The benefit for interest-free loans is calculated using the following formula (subclause 1, clause 1, clause 2, article 212 of the Tax Code of the Russian Federation):

The number of days of using the loan is calculated:

• in the month when the loan was issued - from the day following the day the loan was issued until the last day of the month;
• in the month when the loan is repaid - from the first day of the month until the day the loan is repaid;
• in other months - as the calendar number of days in a month.

Material benefit under an interest-bearing loan agreement: personal income tax

If the loan is issued with interest, but the interest rate under the agreement is less than 2/3 of the key rate of the Central Bank, then the financial benefit is calculated according to the following formula (subclause 1, clause 1, clause 2, article 212 of the Tax Code of the Russian Federation):

Calculation of personal income tax on material benefits from loans

The personal income tax rate for material benefits on loans is (Article 224 of the Tax Code of the Russian Federation):

• if the individual is a resident - 35%;
• if an individual - - 30%.

Tax must be withheld from the nearest cash income paid to an individual.

To calculate personal income tax on material benefits from a loan, you can use.

Payment of personal income tax on material benefits from a loan

Personal income tax withheld from any income paid to an individual (except for vacation pay and temporary disability benefits) is transferred to the budget no later than the next day after payment of income (clause 6 of Article 226 of the Tax Code of the Russian Federation).

A sample payment order for personal income tax payment is given.

Personal income tax and material benefits when borrowing from an individual

If an individual received an interest-free loan from another individual, then income in the form of material benefits from saving on interest does not arise. That is, no one needs to pay personal income tax on such a loan.

Is it necessary to withhold personal income tax when paying interest on a loan agreement if one is concluded with an individual entrepreneur?

Income in the form of interest under a loan agreement received by an individual who is a tax resident of the Russian Federation is recognized as an object of taxation and is taken into account when determining the personal income tax base (clause 1, clause 1, article 208, clause 1, article 209, clause 1, article 210 of the Tax Code ). At the same time, according to paragraphs 1 and 2 of Art. 226 of the Tax Code (hereinafter referred to as the Code), an organization that has borrowed from an individual and pays him the specified interest is a tax agent for personal income tax in relation to this income. Accordingly, interest is paid to an individual minus personal income tax. And the withheld amount of tax on the basis of clause 6 of Art. 226 of the Code is transferred to the budget no later than the day following the day of payment of income to the taxpayer.

The Ministry of Finance in Letter dated February 1, 2016 N 03-04-06/4448 expressed the opinion that the stated procedure should be applied to income in the form of interest on the loan amount, regardless of whether the individual receiving such income is registered as an individual entrepreneur or not . Meanwhile, it seems that this conclusion is applicable only to situations where the “interest” income of an individual entrepreneur is not related to his entrepreneurial activities, that is, when an individual entrepreneur acted as a lender as a simple individual (see also Letter from the Ministry of Finance dated October 3, 2008 . N 03-04-06-01/288). In this case, indeed, the company, in relation to the income paid to it in the form of interest under the loan agreement, is recognized as a tax agent for personal income tax.

It’s another matter if an individual entrepreneur enters into transactions to provide loans as part of his professional activities. In such circumstances, by virtue of paragraphs. 1 clause 1 art. 227 of the Code, individual entrepreneurs independently calculate, pay and declare personal income tax. In other words, the company is not a tax agent for personal income tax in relation to such income. And, accordingly, the individual entrepreneur pays interest in full, that is, without withholding tax amounts.

However, in reality, everything is not as simple as we would like. Obviously, first of all, when deciding whether or not to withhold personal income tax from the amounts of interest paid by an individual entrepreneur under a loan agreement, it is necessary to look at on whose behalf this agreement was concluded. So, if the agreement does not indicate that the party to the transaction is an individual entrepreneur, then you are definitely dealing with an agreement concluded with an ordinary individual. Therefore, when paying interest to the lender, you withhold and pay personal income tax to the budget in the general manner (see, for example, Letters of the Ministry of Finance dated August 12, 2010 N 03-04-05/3-453, dated August 10, 2010 N 03-11 -11/218, etc.).

Let’s say the agreement states that the lender is an individual entrepreneur (and even provides all the necessary details). Is it possible to assume that under such circumstances one can forget about the duties of a tax agent for personal income tax in relation to the income paid to the named individual entrepreneur? Unfortunately, everything is not so simple. The fact is that the controlling authorities include income from those types of activities that are indicated during registration as an individual entrepreneur and information about which is included in the Unified State Register of Individual Entrepreneurs (see, for example, Letters of the Ministry of Finance dated August 13, 2013 . N 03-11-11/32808, dated November 9, 2012 N 03-11-11/338, dated February 1, 2012 N 03-11-11/21, dated December 5, 2011 N 03-11 -11/309, dated December 19, 2011 N 03-11-11/318, etc.). Therefore, at a minimum, to resolve the “fate” of personal income tax, you should look at the extract from the Unified State Register of Individual Entrepreneurs in the part relating to the types of business activities declared by the individual entrepreneur-lender.