Yes, a business bridging loan is usually tax deductible, but the specific rules depend on how the loan is used and under which tax regime the company falls. Below is an overview for the Netherlands:
1. Interest deduction as business expenses
- Purpose of the bridge loan: If the loan is used for business purposes, such as the purchase of commercial premises, rental property, or an investment in a development project, the interest on the bridge loan can be recorded as a business financing expense.
- Deductible: The interest and additional costs (such as closing costs) are usually deductible as operating expenses on the company’s income statement. This reduces the taxable profit, resulting in less tax to be paid.
2. Impact on capital gains tax (box 3)
- For real estate investors: If the commercial real estate falls into box 3 (for example if it is rented out as a private investor), the interest and costs are not immediately deductible, but the credit can reduce the net value (the assets), which can affect the tax burden in box 3.
3. No deduction in specific cases
- Speculative purposes: If the bridge loan is used for personal or speculative purposes that are not classified as business expenses, the interest is generally not deductible.
Advice
Because the tax deductibility of a business bridging loan depends on the specific situation, it is wise to consult a tax advisor or accountant. They can help you make optimal use of the deductibility within the applicable tax rules.