Interest on loans is subject to VAT.
The interest agreed by both parties to the loan contract shall be subject to VAT according to "loan service". However, in real life, affiliated enterprises and individuals often borrow money for free in order to develop their business. If I sign a free loan contract, do I still need to pay VAT?
If free loans are provided between enterprises, VAT will be paid as sales. The State Administration of Taxation will use the interest income approved according to the bank's interest rate for similar loans in the same period as the tax basis.
Individuals who lend money to enterprises for free do not need to pay value-added tax as sales.
In addition, according to data from the Ministry of Finance,
Article 3 of the Notice of State Taxation Administration of The People's Republic of China on Defining the Policy of Exempting Old-age Institutions from Value-added Tax (Cai Shui [2019] No.20) stipulates that from February +0, 2065438 to February 3/KLOC-0, 2020, the funds between enterprises in enterprise groups (including enterprise groups) will be lent free of charge. However, enterprises do not conform to the nature of the group, or should be regarded as sales to pay value-added tax.
Second, what problems should be paid attention to when concluding a loan contract?
1. Read the contract clearly. When signing a contract, the borrower should read the contract clearly, especially the important information such as loan time, amount and term, and check it carefully before signing.
2. Lenders should have a clear understanding of the borrower's loan repayment ability, meet people before signing the contract, fully understand the borrower's loan repayment ability, ensure the smooth recovery of funds and reduce losses.
2. Pay attention to whether the interest meets the requirements. If the borrower and the lender have not agreed on interest, and the lender claims to pay interest within the loan interest range, the court will not support it.
The lender has the right to require the borrower to pay interest at the agreed interest rate, if the agreed interest rate between the borrower and the borrower does not exceed the annual interest rate of 24%. However, if the annual interest rate agreed between the borrower and the borrower exceeds 36%, the interest exceeding 36% shall be deemed invalid.
Third, the way to solve the loan contract dispute
1, negotiation. It refers to a way that the two parties to a contract dispute reach a settlement agreement by stating facts and reasoning on the basis of voluntary mutual understanding and in accordance with relevant national laws, policies and contractual agreements, and resolve the contract dispute by themselves. This is the most favorable way to maintain the relationship between the two sides, which is conducive to avoiding further irreparable contradictions between the two sides.
2. Mediation. It refers to the activity that the two parties voluntarily explain and persuade the two parties to the dispute under the auspices of the third party (that is, the mediator) on the basis of finding out the facts and distinguishing right from wrong, so as to promote their mutual understanding and reach a settlement agreement, thus solving the dispute.
3. arbitration. That is, according to the arbitration clause concluded by both parties in the contract or the arbitration agreement reached voluntarily, the third party shall arbitrate the contract dispute according to law to solve the contract dispute. Arbitration is a legal system for resolving disputes generally established in modern countries. But the price is higher.
4. litigation. That is, a lawsuit. It usually takes a long time, but the cost is relatively low.
It is the duty of every citizen to pay taxes according to law. The above is "Does the loan contract need to pay VAT?" And other relevant legal knowledge such as "what should be paid attention to when concluding a loan contract".