If you find yourself in a situation where you need someone to lend you money or lend it to someone you know, you can do so through a document called a loan contract between individuals where all the legal conditions that will govern it are reflected.
It must be in writing since it could cause the Treasury to think that it is a hidden donation with a relative.
It is formally defined as the economic transaction agreement between a loan shark and a borrower, where an amount of money is offered, which will be reimbursed within a certain period, if the disbursement of the money does not occur, payment will have to be made. donation contract.
These types of loans between individuals can be free (without interest) or for-profit (with interest).
These contracts are subject but exempt from the transfer tax and documented legal acts, that is, Form 600, and will have a period of one month from the date of signing the contract to settle it at the Tax Agency.
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How to make loans between individuals?
The contract between individuals must meet the following requirements:
- Header indicating the date and place of celebration
- Personal data of the people who sign it, in this case, the loan shark and the borrower
- Amount of money loaned
- Indicate whether or not the loan between individuals has interest
- The modality of the repayment of the loan, that is, monthly, quarterly, etc.
- Other important conditions that include the consequences of non-payment of any installment
The loan model between individuals
We enclose a loan model between individuals without interest :
How to make a loan between individuals without interest?
This loan contract between individuals without interest must be specified in it, as in the model that we present to you.
If the 0% interest rate does not appear contemplated, you could have problems with the Treasury, since they could interpret that a donation is being hidden, which is settled by the Inheritance and Gift Tax.
Taxation of a money loan between individuals
If when lending the money between individuals a free interest is agreed, neither party will have to declare any benefit to the Treasury, they will only have to justify the payment of the installments where it can be verified that no interest has been paid
But if it is the case that we agree on interest on the borrowed money, the loan shark will have to declare the returns on movable capital in the Personal Income Tax.
As if the borrower used this loan for business purposes, he could deduct the payment of that interest as an expense in personal income tax.
At Billin, we want to advise you so that you benefit from this exchange of money subject to the Law so that you do not have tax problems such as those that a loan between individuals may have.