Provisions of tax policy on interest expenses

According to Article 4 of Circular 09/2015 / TT-BTC dated January 29, 2015 guiding the payment method for mutual loan, loan and loan repayment transactions between non-group enterprises credit institutions.

Các doanh nghiệp không phải tổ chức tín dụng (là các doanh nghiệp không thành lập, tổ chức và hoạt động theo quy định của Luật tổ chức tín dụng) khi thực hiện các giao dịch vay, cho vay và trả nợ nhau sử dụng các thanh toán định dạng như sau:

a) Payment in Check;

b) Payment by payment order – money transfer;

c) Other suitable non-cash payments according to current regulations.

Enterprises other than credit institutions, when performing transactions of borrowing, lending and repaying debts with each other’s properties (not in cash), deducting debts, transferring debt obligations comply with regulations. of the business law.

-> So, when the enterprise is not a credit institution making loan transactions, lending and repaying each other, it is NOT allowed to make payment in cash (paper money, metal money issued by the Bank. State release).

Interest expenses MUST serve production and business activities in the period.
According to the provisions at Points 2.17 and 2.18, Clause 2, Article 6 of Circular No. 78/2014 / TT-BTC dated June 18, 2014 and Article 4 of Circular No. 96/2015 / TT-BTC dated June 22. In 2015, amending and supplementing a number of articles of Circular No. 78, interest expenses are NOT included in deductible expenses when calculating CIT in the following cases:

The interest expense for production and business loans of the subjects other than credit institutions or economic organizations exceeds 150% of the basic interest rate announced by the State Bank of Vietnam at the time of borrowing.
=> So when borrowing individuals, if the interest rate exceeds 150% of the basic interest rate of the State Bank of Vietnam, that excess will not be counted as deductible expenses when calculating CIT.

Note: The base interest rate announced by the State Bank of Vietnam: The base interest rate is the lowest interest rate, which can be considered the “floor” interest rate decided by the State Bank of Vietnam.
According to Article 1, Decision No. 2868 / QD-NHNN dated November 29, 2010 on the basic interest rate in VND issued by the Governor of the State Bank has the following provisions: version in VND is 9.0% / year ”.
This Decision takes effect on December 1, 2010 and replaces Decision No. 2619 / QD-NHNN dated November 5, 2010 of the Governor of the State Bank on the basic interest rate in VND. This document is still in effect so far and does not specify whether the interest rate for a loan or a loan is still used to determine the interest rate exceeding rate according to Circular 78.

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