Tax on loan

5 posts in this topic

Hello TT members, 

 

I have a few questions regarding money transfer between Germany and EU countries. 

 

.1. If I lend someone money, do I need to pay tax once I receive the money back? Also, is there a limit on how much you can lend someone (private to private) until some laws apply? I receive no interest. 

 

.2. Assume I take money from the bank and give it to someone outside Germany. That someone pays the monthly rate. I do not make any profit but I will get more money from him that the amount I lend  him(due to bank fees). Do I need to pay any tax on the "additional income"? Are there any legal constrains? 

 

.3. From what I've read, a gift received is taxable only if it is above 20.000 Euros. Is there a time limit on composed gifts? For example, if I receive 1000 Euros each year, do I have to pay the tax after 20 years (assuming law doesn't change)? 

 

Thank you.

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3. Pretty sure it's 10 years, so you reset every 10.  

2. unclear how you're getting 'additional income'.   person a lends to person b.  Does B pay interest?  What is 'monthly rate'?  loan repayment?  Are you the bank who charges fees?  You're making it sound shadier than it needs to sound imo.  But maybe it is actually really shady, who knows.  

1. good question.  probably.  

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1 minute ago, shockedpenguin said:

3. Pretty sure it's 10 years, so you reset every 10.  

2. unclear how you're getting 'additional income'.   person a lends to person b.  Does B pay interest?  What is 'monthly rate'?  loan repayment?  Are you the bank who charges fees?  You're making it sound shadier than it needs to sound imo.  But maybe it is actually really shady, who knows.  

1. good question.  probably.  

 

For .2. it's basically asking for a loan for someone else. Let's take one example:  

 

I ask the bank for 30.000 Euro. I want to give the 30.000 euro to a friend, who is willing to pay bank interest rate. I don't profit or end up with any money out of the deal. 

 

I have to make 2 contracts: 

    - Contract with the bank for the 30.000 Euro I get from them 

    - Loan contract with my friend for giving him 30.000 

 

The bank needs 1000 euro / month for 33 months. So at the end of the contract, the bank earns 3000 euro for the whole deal. 

 

However, I don't think I can make a "loan" contract with my friend saying that I give him 30.000 euro and get back 33.000. I am not a bank and charging interest for a loan is probably some sort of loan sharking (?). 

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Sounds fishy.  

I'm assuming that you can't be guarantor because they're outside the country and have all ready tried.  Maybe you can arrange multiple people to gift money to the person?  Also, family can gift more I think, but don't have a source.  

I'm no lawyer and this isn't advice because I've no idea if what I'm saying is legal or not.  :(  

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I am not trying to "dodge" the law. I just want to know what is the law so I don't get into trouble.

 

 

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