Movable income is subject to a single flat-rate levy (PFU) of 30% (12.80% + 17.20% social security contributions) for income tax. However, taxpayers may choose to be taxed under the progressive income tax schedule for all their income subject to the PFP. You then benefit from the deduction of 6.8 CSG points. In addition, in companies subject to corporation tax, non-deductible interest is considered as dividends and therefore benefits from the 40% exemption limit. The average effective interest rate charged by credit institutions in the second quarter of 2022 for variable-rate loans to companies is 1.96%. According to the tax authorities, the tax authorities state that, `in order to determine whether or not the interest exceeds the limit laid down, account must be taken of its gross rate and amount and not of its net amount after deduction of income tax or withholding tax imposed on the beneficiary. It is, in fact, this gross amount that appears in the company`s expenses. In addition, each current account is examined separately and there is no set-off between net interest income on one deposit account (interest rate applied above the legal limit) and a deficit on another account. » BOI-BIC-CHG-50-50-30, 130. This average for the 3rd quarter of 2022 is now known, so it is possible to determine the maximum deduction rates for interest paid during the twelve months from 30 June 2022 to 29 September 2022 inclusive.
These rates are as follows: These rates are calculated from the formula of BOI-BIC-CHG-50-50-30, 70. However, provided that the share capital is fully paid-up, interest paid to the partners as remuneration for the sums they make available to their company (remuneration or loans credited to their partner`s current account) may be admitted to the deductible expenses of the partner at a certain rate. same variable depending on the balance sheet date and the duration of the financial year. If an affiliate works for the company and the company is temporarily unable to pay him, it is not uncommon for his salary to be credited to his partner`s current account until there is a better cash flow. However, this operation is anything but trivial. The partner concerned may, in the absence of a current account contract, demand the reimbursement of the current account. Amounts can be refunded at any time. The tax authorities have published the applicable TMPs for the financial years ended between 31 December 2021 and 30 March 2022 (BOFiP News of 19 January 2022), BOI-BIC-CHG-50-50-30, §40). Interest on shareholders` current accounts is only deductible if the share capital is fully paid-up. This limitation on the deduction of interest mainly concerns public limited companies which have the possibility of distributing paid-up capital. Share the post „Current interest rates: closures as of December 31, 2021“ The following interest rates refer to twelve-month fiscal years ending in the periods from the last day of one month to the penultimate day of the following month, if the closing date of a fiscal year is set during the month.
The maximum rate of interest deductible from partners` current accounts (sometimes referred to as the „linked current account“ rate) applies to both companies subject to income and corporation tax. For fiscal years ending December 31, 2021, the interest rate for partners who allow a maximum tax deduction is 1.17%, compared to 1.18% the previous year. 1. Thus, the deductible interest rate for a twelve-month period coinciding with the calendar year shall be calculated on the basis of the quarterly average effective interest rates published in the Official Journal divided by 4. For companies that end a twelve-month financial year in the fourth quarter of 2022, the annual interest rate can already be set: In the company`s financial statements, interest on current account liabilities must be credited to the account 455 partner current accounts and debited from the account 6615 interest on current accounts and liabilities on deposits (PCG, Kunst. 944-45). This TMP is published quarterly by the tax administration in its documentation in the BOFiP (Official Bulletin of Public Finance). If a rate of pay higher than the RMP is used, the portion of the interest exceeding this rate must be reintegrated outside the accounts.
This results in a maximum deductible interest rate = (t1 + t2 + t3 + t4) / 4 or for a closing date of 31. December 2021: The reference rate used to calculate the maximum deductible interest rate is the annual average average of the average effective interest rates charged by credit institutions for variable-rate loans to businesses with an initial maturity of more than two years. As long as it does not exceed the maximum rate, interest paid as remuneration for current accounts is deductible from the company`s tax result. For the partners, the interest paid to them, deductible or not, constitutes income from movable capital (companies subject to corporation tax). As this is a 12-month fiscal year, interest rates are allowed as deductions as follows: The tax authorities recently communicated for the first quarter of 2021 the maximum rates that allow the full deduction of interest on amounts left by shareholders in current accounts. The MTP is 1.17% for the years ended December 31, 2021. The maximum deduction rates for the years ending June 30, 2022 and ending September 29, 2022 inclusive are now known. The deduction of interest paid by a company subject to corporation tax to its partners or shareholders as remuneration for the sums they place at its disposal or made available to it in addition to its share of the capital is limited to an interest rate updated quarterly.