According to that provision, the interest rate used to calculate the interest ceiling which may be deducted is the average annual average of the effective interest rates charged by credit institutions on variable-rate loans to undertakings with an initial maturity of more than two years. 1. Thus, the deductible interest rate for a twelve-month period coinciding with the calendar year shall be calculated on the basis of the quarterly average effective interest rates published in the Official Journal divided by 4. The rise in interest rates relative to current high inflation is now visible. The rate thus increased from 1.15% in Q2 (closings between March 31 and June 29, 2022) to 1.49% for closings between August 31 and September 29, 2022. The increase is expected to continue in the coming months. The average effective interest rate charged by credit institutions in the second quarter of 2022 for variable-rate loans to companies is 1.96%. Partners` current accounts: maximum interest rate for Q3 2021 BIC – Update of the maximum interest rate allowed as a tax deduction The tax authorities have just communicated the maximum interest rates that allow a full deduction of the interest paid to the partners for the amounts they leave on the current accounts of previous years. The maximum rate of interest deductible from partners` current accounts (sometimes referred to as the „linked current account“ rate) applies to both companies subject to income and corporation tax. As long as it does not exceed the maximum rate, interest paid as remuneration for current accounts is deductible from the company`s tax result. For the partners, the interest paid to them, deductible or not, constitutes income from movable capital (companies subject to corporation tax). In the case of a 12-month financial year, the following interest rates are allowed as deductions: The shareholder concerned may, in the absence of a current account agreement, demand the repayment of the current account.
Amounts can be refunded at any time. This results in a maximum deductible interest rate = (t1 + t2 + t3 + t4) / 4 or for a closing date of 31 December 2021: The following interest rates refer to twelve-month financial years ending in the periods from the last day of a month to the penultimate day of the following month, if the reference date of a financial year is fixed during the month. In the Company`s accounts, interest on current liabilities must be credited to account 455 current accounts of partners and interest on current accounts and liabilities (PCG, Art. 944-45) must be debited from account 6615. Interest paid to the partners of a company on the basis of the current accounts they hold with this company are deductible from taxable income within the limit of a maximum interest rate referred to in Articles 39, 1, 3 ° of the CGI. The deduction of interest paid by a company subject to corporation tax to its partners or shareholders as remuneration for the sums they place at its disposal or made available to it in addition to its share of the capital is limited to an interest rate updated quarterly. These companies can repay these accounts by paying interest to partners, just like a bank loan. In order to determine the taxable result, Art.
39 para. 1 CGI 2 conditions for this interest to be fully deductible: According to them, the tax authorities specify that „to determine whether or not the interest exceeds the fixed limit, its gross rate and its gross amount, and not its net amount, after deduction of income tax or withholding tax levied on it, are in the hands of the recipient. It is, in fact, this gross amount that appears in the company`s expenses. In addition, each current account is examined separately and there is no set-off between net interest income on one deposit account (interest rate applied above the legal limit) and a deficit on another account. » BOI-BIC-CHG-50-50-30, 130. This interest is the remuneration of the partners` current account advances. These are means that are made available to society.
