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vGA: Standard interest on a loan receivable (BFH)

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vGA: Standard interest on a loan receivable (BFH)

Online message – Thursday 05/25/2023

Corporate Income Tax | vGA: Standard interest on a loan receivable (BFH)

The waiver of appropriate interest on a loan receivable from a GmbH booked in a shareholder clearing account can lead to a vGA (; published on ).

Facts: It is disputed, among other things, whether the defendant FA in the disputed years 2014 and 2015 rightly took into account hidden profit distributions when determining the income of the plaintiff, a GmbH, because the plaintiff did not pay interest on accounts receivable from its (controlling) shareholder.

The BFH saw the appeal by the plaintiffs as unfounded:

  • The fact that the BFH regularly assumed a vGA in the non-remunerated withdrawal of liquidity at the expense of the corporation also speaks for the existence of a vGA (e.g
    ).

  • The FG rightly assumed that a vGA existed. The clearing account, which showed a balance in favor of the plaintiff, did not bear interest during the years in dispute, unlike in previous years. However, contrary to the opinion of the appeal, regardless of the fact that interest rates were low during the disputed years and in the case of investments in banks there was even a threat of “penalty interest” (custody fees), from the point of view of the plaintiff lending, it can be assumed that the increase in assets was prevented. Because according to the Senate case law, the usual bank credit interest, which was actually almost zero in the years of the dispute, not the sole benchmark for the arm’s length test.

  • The FG must determine the relevant arm’s length price, taking into account all the circumstances of the specific individual case, which is usually an estimate
    § 162 paragraph 1 of the AO makes necessary. The decision on how the third-party comparison is to be carried out in individual cases is in principle the responsibility of the FG.

  • However, when determining the “arm’s length” price, this must take into account that there is often not “the” arm’s length price for the service in question, but rather a range of prices. In such a case, the comparison price that is most favorable for the taxpayer is to be used as a basis for calculating the vGA.

  • If there are no other indications for the regularly required estimate of the arm’s length interest, there is no objection if it is assumed from experience that private lenders and borrowers share the usual bank margin between debit and credit interest (so-called margin sharing; adherence to the judgements:
    and
    ,
    ).

  • There is no contradiction to the so-called bandwidth case law, according to which the “correct” third-party price does not represent a point value, but consists of a range of all prices customary for others. Because the “mean value” resulting from the margin division is derived from third-party comparisons (customary bank credit and debit interest rates) (cf.
    ).

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Those:
; NWB Datenbank (JT)

Source(s):
NWB RAAAJ-40746

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