Interest free loans

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  • Tatia
    New Member
    • Oct 2011
    • 7

    #1

    [Question] Interest free loans

    Hello everyone

    If i give my employee a personal loan of R2000, would I be able to deduct this when calculating my company tax liability at year end?
  • georgevorster
    New Member
    • Nov 2011
    • 8

    #2
    Not if the loan is repayable.

    Comment

    • Imp
      Email problem
      • Mar 2012
      • 47

      #3
      Employee loans are not deductible for income tax purposes.

      Comment

      • Blurock
        Diamond Member

        • May 2010
        • 4203

        #4
        What about SARS regarding an interest free loan as a fringe benefit?
        Excellence is not a skill; its an attitude...

        Comment

        • BusFact
          Gold Member

          • Jun 2010
          • 843

          #5
          Originally posted by Blurock
          What about SARS regarding an interest free loan as a fringe benefit?
          Yip, if anything it will increase the taxes, as the employees tax goes up with this extra benefit being provided. It certainly does not decrease the tax liability.

          Comment

          • Imp
            Email problem
            • Mar 2012
            • 47

            #6
            And if the company is a VAT vendor they would also have to account for output tax on the fringe benefit.

            Comment

            • geraldenek
              Silver Member

              • Jul 2008
              • 229

              #7
              loans repayable only affect the balance sheet - so you won't be able to deduct it
              Geraldene Kapp
              Professional Tax Help
              www.mytaxhelp.co.za

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