Private lending lenders deduct all or part of the interest from the principal in advance, which is popularly called "beheading interest", which is equivalent to the borrower paying the price for the loan before starting to use the funds, so that the borrower can't get the full amount of the loan from the beginning. This practice will lead to the borrower actually getting less than the principal recorded in the loan voucher, which will affect the normal use of the borrower's funds, increase the borrower's capital cost to a certain extent, and damage the legitimate rights and interests of the borrower, obviously unfair.
Private lending lenders may not deduct interest from the principal in advance. Interest is the use fee of money in a certain period of time. The lender shall not deduct interest from the principal in advance because the loan is paid by the borrower, otherwise it will affect the determination of the principal and interest amount. If the lender claims to repay the loan and interest according to the principal recorded in the loan certificate after deducting the interest from the principal in advance, the court will calculate the principal and interest according to the actual loan amount.
The plaintiff and the defendant were friends, and the defendant borrowed money from the plaintiff for lack of bridge funds. The plaintiff signed an IOU with the defendant, claiming that the plaintiff lent the defendant RMB 200,000 for two months. The plaintiff signed for confirmation, and the defendant signed and confirmed by fingerprint. At the same time, the defendant issued a receipt to the plaintiff, claiming that the defendant received a transfer of RMB 200,000 from the plaintiff's mobile banking. After deducting the interest of 6,000 yuan for two months, the plaintiff transferred194,000 yuan to the defendant's account through mobile banking. Two months later, the plaintiff asked the defendant to repay the principal of 200,000 yuan, but the defendant did not agree. The plaintiff then sued the defendant in court.
The court held that in this case, although the debit note signed by the plaintiff and the defendant and the receipt issued by the defendant stated that the loan amount was 200,000 yuan, the actual loan amount of both parties should be194,000 yuan. Combined with the inquiry table of bank transactions submitted by the plaintiff and the fact that the plaintiff admitted to deducting 6,000 yuan of interest from the principal in advance, the court ordered the defendant to repay the loan of194,000 yuan to the plaintiff, and calculated the interest based on this amount. After the verdict was pronounced, neither party appealed.
Comment on Article 670 of the Civil Code of People's Republic of China (PRC): The interest of a loan shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan will be repaid according to the actual loan amount and the interest will be calculated.
Why can't loan interest be deducted from input 1, and interest VAT input tax can't be deducted from VAT output tax?
2. Relevant provisions: The provisions on relevant matters in the Implementation Measures for the Pilot Project of Changing Business Tax to VAT (Caishui [2065438+06] No.36): The original value of VAT is generally labor, intangible assets or real estate purchased by taxpayers.
The input tax of the following items shall not be deducted from the output tax: the purchase of passenger services, loan services, catering services, daily services of residents and entertainment services.
What items of input tax cannot be deducted?
1. According to Article 10 of the Provisional Regulations on Value-added Tax in People's Republic of China (PRC) (the State Council Order No.691), the input tax of the following items shall not be deducted from the output tax:
(1) Goods, services, intangible assets and real estate purchased for simple taxation, exemption from value-added tax, collective welfare or personal consumption;
(two) abnormal losses of purchased goods and related labor and transportation services;
(3) Goods purchased (excluding fixed assets), services and transportation services consumed by products in process and finished products with abnormal losses;
(four) other projects stipulated by the State Council.
Second, according to the provisions of Article 27 of the Implementation Measures for the Pilot Reform of Business Tax to VAT in Annex I of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Comprehensively Pushing Forward the Pilot Reform of Business Tax to VAT (Caishui [2065438+06] No.36), the input tax of the following items shall not be deducted from the output tax:
(1) Goods purchased, processing, repair and replacement services, services, intangible assets and real estate used for simple taxable items, items exempted from value-added tax, collective welfare or personal consumption. The fixed assets, intangible assets and real estate involved only refer to the fixed assets, intangible assets (excluding other equity intangible assets) and real estate dedicated to the above projects. Taxpayers' social and entertainment consumption belongs to personal consumption.
(2) Goods purchased with abnormal losses and related processing, repair and transportation services.
(3) Goods purchased (excluding fixed assets), processing and repair services and transportation services consumed by products in process and finished products with abnormal losses.
(four) abnormal losses of real estate, as well as commodity procurement, design services and construction services consumed by real estate.
(5) Goods, design services and construction services consumed by real estate projects under construction with abnormal losses.
Taxpayers' newly built, rebuilt, expanded, repaired and renovated real estates are all real estate projects under construction.
(6) Loan services, catering services, daily services for residents and entertainment services purchased.
(seven) other circumstances stipulated by the Ministry of Finance of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China.
The goods mentioned in Items (4) and (5) of this article refer to the materials and equipment that constitute a real estate entity, including building decoration materials and water supply and drainage, heating, sanitation, ventilation, lighting, communication, gas, fire protection, central air conditioning, elevators, electric power, intelligent building equipment and supporting facilities. Unless otherwise specified, the contents specified in the annex of this notice shall be implemented as of 2065438.
According to Article 2 of the 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 [2065438+06] No.36), the original VAT general taxpayer purchases services, intangible assets or real estate, and the input tax of the following items shall not be deducted from the output tax:
(1) is used for simple tax items, VAT-exempt items, collective welfare or personal consumption. The intangible assets and real estate involved only refer to the intangible assets dedicated to the above projects (excluding other equity intangible assets) and real estate.
Taxpayers' social and entertainment consumption belongs to personal consumption.
(2) Abnormal losses of purchased goods and related processing, repair and transportation services.
(3) Goods purchased (excluding fixed assets), processing and repair services and transportation services consumed by products in process and finished products with abnormal losses.
(4) Abnormal losses of real estate, and purchased goods, design services and construction services consumed by real estate.
(5) Goods purchased, design services and construction services consumed by abnormal losses of real estate projects under construction.
Taxpayers' newly built, rebuilt, expanded, repaired and renovated real estates are all real estate projects under construction.
(6) Loan services, catering services, daily services of residents and purchased entertainment services.
(seven) other circumstances stipulated by the Ministry of Finance of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China.
The goods mentioned in items (4) and (5) above refer to the materials and equipment that constitute the real estate entity, including building decoration materials and water supply and drainage, heating, sanitation, ventilation, lighting, communication, gas, fire protection, central air conditioning, elevators, electrical and intelligent building equipment and supporting facilities.
The investment and financing consulting fees, handling fees, consulting fees and other fees directly related to the loan paid by taxpayers to the lender by accepting the loan service shall not be deducted from the output tax.
Why the loan interest can't be deducted from the input is introduced here first. Because the tax bureau clearly stipulates that interest cannot be used to offset input tax, the finance department should also be able to understand the tax bureau's regulations when recording loan interest and deal with it according to relevant policies to avoid the impact of VAT processing errors on the whole account.