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Thread: Interest free loans

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    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?

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    New Member georgevorster's Avatar
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    Not if the loan is repayable.

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    Employee loans are not deductible for income tax purposes.

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    Diamond Member Blurock's Avatar
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    What about SARS regarding an interest free loan as a fringe benefit?
    Excellence is not a skill; its an attitude...

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    Quote Originally Posted by Blurock View Post
    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.

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

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    Silver Member geraldenek's Avatar
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    loans repayable only affect the balance sheet - so you won't be able to deduct it
    Geraldene Kapp
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    www.mytaxhelp.co.za

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