Credit: other payables.
Individuals who lend money to enterprises for free do not need to pay VAT as sales.
References: Notice of the Ministry of Finance in State Taxation Administration of The People's Republic of China on Comprehensively Promoting the Pilot Project of Changing Business Tax to VAT (Caishui [20 1 6] No.36) and its annex1:Implementation Measures for the Pilot Project of Changing Business Tax to VAT.
The pre-tax deduction of corporate income tax for the interest expenses borrowed by the company from individuals is divided into the following situations:
Case 1: If the interest expenses incurred by an enterprise in borrowing from shareholders or other natural persons related to the enterprise do not exceed the amount calculated according to the interest rate of similar loans of financial enterprises in the same period, deduction is allowed, and the excess will not be deducted; At the same time, the ratio of creditor's rights investment to equity investment of related parties is: financial enterprises are 5:1; Other enterprises are 2: 1, and the excess will not be deducted.
Case 2: If the interest expenses incurred by the enterprise in borrowing from unrelated internal employees or other personnel meet the following conditions at the same time, the part that does not exceed the amount calculated according to the similar loan interest rate of the financial enterprise in the same period shall be deducted, and the excess part shall not be deducted.
1. The loan between enterprises and individuals is true, legal and effective, and there is no illegal fund-raising purpose or other illegal acts;
2. Enterprises and individuals sign loan contracts.
Basis: Article 1 of the Notice on Pre-tax Deduction of Interest Expenses of Enterprises Borrowing from Natural Persons (Shui Han [2009] No.777) and the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Tax Policies Related to Pre-tax Deduction Standards of Interest Expenses of Related Parties of Enterprises (Caishui [2008]121No.