I’ve lent some money to a friend of mine and was wondering how do I declare it on the taxes.
I’m not asking for interests and my friend is still taxed at source so I have no idea how should be declared on their side and mine as well.
It might lower my taxes as well, not sure about that and that’s not the point.
Not a tax expert:
Isn’t it still your money and therefore nothing really changes? Kind of like a personal bond that isn’t securitized, but technically the money lent is still yours?
I could see a change in income if your friend paid interest but you indicate that’s not the case.
Only way this could lead to a change in taxes is if somehow you … ahem … forgot to desclare the money that is lent out, it’s nowhere on your year end bank statements, either, and therefore your wealth tax might be lower?
It could be a problem if you forget to declare it but your friend doesn’t.
You simply add an entry for the loan to your assets (in the Wertschriftenverzeichnis). If your friend files a tax declaration (despite being taxed at source), they can deduct the loan as debt. However, they aren’t required to file a tax declaration just because they have that loan.
Loaning money to a friend without interest is equivalent to keeping it in a bank account without interest (loaning your money to the bank), i.e., it’s tax neutral if you properly declare the loan.
In some cases the tax authorities may not accept loans without interest. I don’t think it’s typically a concern for a small loan but I’m not familiar with the details.
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