Interest And Specific Business Tax On Director'S Loan

[JOCK67]

I borrowed money from my Company as a 'Loan to Director'. The Revenue Department say that this loan must incur interest and that when the loan is repaid with interest my company will need to pay Specific Business Tax on the Interest. Does my company have to charge interest on a personal loan? Why is SBT applicable - I read in the Revenue Code that SBT is applicable to financial companies who regularly provide loans as part of their normal business operation, in which case that should not apply to my company? If the company does charge interest on the loan how should this be calculated? Thanks for any advice on this.

[Sunbelt Asia]

As the Director you have an obligation under Thai law to manage the company to the best of your abilities and to answer to its shareholders. Thus no zero-interest loans as the company has a duty to its shareholders to earn a profit. Since the interest is income then the

tax will need to be paid. The minimum allowed' for a loan is 3% interest.

[sunbelt][/sunbelt]