Skip to main content

Loan interest

Tax risk: 🔥🔥 | Deductibility: 100%

Written by Lionel ROSU

It depends on who the lender is and certain limits

If you take out a (mortgage) loan or leasing from a bank or external third party to finance a professional purchase 💰, there is no limit on deductibility (except for the business use percentage if you are a sole proprietor and you are financing a car, for example).

However, if your company borrows from its shareholder/director, or from that person's spouse, legally cohabiting partner or child, certain limits apply:

  • The amount of the loan generating interest may not exceed: taxed reserves at the start of the accounting period + tax-exempt paid-up capital at the end

  • The maximum rate is the market rate for a loan with the same characteristics (amount, duration, risk...), unless it is a non-mortgage loan with no fixed term. In that case, the rate is set by the NBB (4.07% for interest relating to 2021)

💡 If you are operating through a company and want to be sure about the deductibility of interest on your loans, discuss it with your accountant! A proper analysis is essential!

Did this answer your question?