How to borrow money and not pay taxes

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shukla7789
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Joined: Tue Dec 24, 2024 4:26 am

How to borrow money and not pay taxes

Post by shukla7789 »

Borrowing does not have a good connotation for most of us. Most often it means returning money with interest to a bank or a loan company. The way out of the situation seems to be borrowing money from family or friends. But here the oppressive tax system can, in some situations, demand tax on such a loan. That is why I will explain how to borrow money and not pay tax on a private loan. Acting in accordance with the law, without having to share money with the tax office. Because financial help from loved ones is still one of the most frequently chosen forms of obtaining financing.

Loans from family and friends
I mention family or friends because this is the group that most respondents would agree to lend money to in the study. According to the respondents, the amount would be rather small, according to the denmark whatsapp database commissioned by Wonga Polska. Participants most often mentioned amounts of up to PLN 500. People in the countryside are more friendly and willing to help, as as many as 45% would agree to grant a loan. Among residents of large cities, only 23% of respondents would agree to lend money to family or friends. However, in each of these cases, the need to pay tax may arise.

credit loan banknotes payment
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Borrowed Money Tax
According to Polish law, loans are taxed at 2% of the amount. There is an exception, which is loans granted to the closest family. This includes spouses, siblings, parents-in-law and daughter-in-law or son-in-law. This privilege can also be used by "descendants" and "ascendants", i.e. mother, father, son and daughter.

Tax exemption limit
The tax office will not ask for its "share" if the loan amount does not exceed PLN 9,637 over 5 consecutive years. However, it is possible to borrow a higher amount without paying tax. If the loan is reported to the Tax Office and is granted to the closest family. This exemption does not apply to daughters-in-law, sons-in-law and parents-in-law. A loan for a family exceeding PLN 9,637 must be reported to the tax office within 14 days of its granting. On the form regarding taxes on civil law contracts.
When you borrow money from friends, the legislator also provided an option in which you will not pay tax. Here, the loan limit from one person is a maximum of PLN 5,000. Under two conditions. The first is, of course, the need to notify the Tax Office of this fact. The second condition is the maximum amount of loans from friends, up to PLN 25,000, over 3 consecutive calendar years.

savings money
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Drawing up a loan agreement
Giving the transfer of funds an official legal form should primarily be the responsibility of the borrower. Because writing a loan agreement will allow to protect their interests to a certain extent. You can easily find a template of such an agreement on the Internet today. Pay attention to whether it contains all the necessary information. Such as the amount being borrowed, who, to whom, the loan period, the date and form of repayment (cash, transfer), and possibly the interest rate. If the parties to the agreement are related (family), it is also worth entering the degree of relationship. Such a document does not need to be confirmed by a notary, but it should be drawn up in two identical copies.

Failure to complete formalities
Unfortunately, the desire to conceal the borrowing of money may end in financial consequences. If the lender does not report the loan to the Tax Office, the latter may charge punitive interest. Amounting to 20 percent of the borrowed amount instead of 2. I would like to emphasize that I am not an expert in this field, I reserve the right to errors in the text or its lack of full validity, in the event of new changes in tax law.
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