The requirement that a loan (or a guarantee) between BV and DGA must be business has a simple background. Otherwise the temptation is much too large to borrow large sums from the BV at a meager interest rate. To prevent this, the legislator has ensured that it is in the interest of the dga itself that a loan is business-like. Because otherwise the Tax Authorities can view the loan as a payment to the dga and seek additional income tax.
What are business conditions?
The essence is that a loan is only businesslike if an independent third party had also provided that loan on the same terms. A huge loan at zero percent interest and without further collateral is therefore not due to the ballotage. In order to determine whether the loan is business, a judge generally checks the following aspects:
- Have the conditions for the loan been laid down in a written agreement?
- Has a repayment schedule been drawn up?
- Have sufficient securities been provided for the lending party?
- Has a business interest been agreed?
But as always: the judgment can differ per loan. For example, last year the Court of Appeal in Arnhem found a loan without collateral or repayment schedule business-like. Another dga went wrong by subordinating a loan that met all business conditions with a new loan from the bank. Such a deterioration of a position as a creditor would never be accepted by an independent third party, according to the court. That made the loan non-existent.
What is a business interest?
That is not that easy to determine. Comparing with a business savings account does not make much sense at the moment, because the interest rates there fluctuate around 0%. The Tax and Customs Administration does not consider this to be business-like. The tax authorities themselves refer to two returns (the T-return and the U-return) that are based on government bonds and that are also used in the pension world. You could then take the average of this annually as a variable interest on the loan. More than the percentage itself, it is about the surcharge that the BV charges on top of the interest rate used. This depends, for example, on the term and the risk of the loan. Unfortunately, there is no fixed table with which interest rates belong to which risk, it is rather obvious that the DGA should look for a good substantiation of the percentage.
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