Can a Partner Receive a Loan from the Company?

It is quite common for business partners to seek out their accountants to ask whether it is possible for the company to make loans to their partners.. The answer to this question is quite simple: sim! As long as there is a contract establishing such a loan.

However, it is essential that the parties prepare a contract that contains the following information: the value of the mutual, the qualification of the parties, the return period, the interest that will be paid, among other clauses.

This contract must be well drafted, This is because if this does not happen, the tax authorities may understand that this value corresponds to some type of donation. What is more, in accordance with art. 592 of the Civil Code, “If there is no deadline set, the term of the loan will be considered 30 (thirty) dias, at least".

Furthermore, the remuneration of the loan contract (charges) needs to be determined considering the current market value. For example, whether the interest charged is being established on the basis of 1% per month, It is not recommended to take out the loan with a higher remuneration, since there will be a risk of questioning by the tax authorities, especially if this is the case where, whoever is taking the loan is a company opting for real profit, which will deduct the amount of interest.

There is also a situation in which the opposite may occur., i.e., the partner loan (natural person) for a legal entity in which it participates without charging interest. Cases in which loans occur between related companies (controlling and controlled companies, and related or interconnected) interest charges may be waived.

Income Tax in These Cases

The income tax levied on this type of operation has staggered rates considering the period for contracting the operation.

These rates are:

22,5% (twenty-two integers and five tenths of a percent), in operations with a term of up to 180 (one hundred and eighty) dias;
20% (twenty percent), in operations with a term of 181 (one hundred and eighty one) days until 360 (three hundred and sixty) dias;
17,5% (seventeenths and five tenths of a percent), in operations with a term of 361 (three hundred and sixty one days) until 720 (seven hundred and twenty) dias;
15% (fifteen percent), in operations with a term above 720 (seven hundred and twenty) dias.

Income obtained through the loan must be declared as income subject to exclusive taxation, and the withheld tax cannot be offset in the declaration.

If the lending partner, i.e., the person who made the loan is a legal entity:

Income arising from loan operations is part of real profit, the presumed profit, or arbitrated for the purposes of determining the IRPJ calculation basis.
The IRRF levied on income is offset against the IRPJ owed by the company based on real profit, presumed or arbitrated.

Emphasizing again that for the loan from company to partner to have valid effect before third parties, the contract must be registered at the document title registry. In accordance with judicial and administrative jurisprudence, and the lack of registration can be replaced by the presentation of the contract and the accounting of the operation.

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