OFFICIAL LETTER 1716/CTBPH-TTHT ABOUT BORROWING MONEY FROM THE DIRECTOR FOR BUSINESS ACTIVITIES
Official letter 1716/CTBPH-TTHT about borrowing money from the director for business activities:
In case the Company borrows money from the director who is the person who operates and controls the enterprise and the borrowed amount is at least 10% of the owner's capital contribution at the time of the transaction during the tax period, it is determined to have an affiliated relationship. In that case, the borrowing transaction between the Company and the individual who operates and controls the Company is an affiliated transaction according to the provisions of Point 1, Clause 2, Article 5 of Decree No. 132/2020/ND-CP dated November 5, 2020 of the Government. If the Company borrows money from an individual without interest, the above borrowing activity is an exchange not at the normal transaction price on the market, so the individual is subject to tax assessment according to the provisions of Point d, Clause 1, Article 50 of the Law on Tax Administration No. 38/2019/QH14.
