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A company requested clarification on whether it must issue an invoice including VAT and withholding tax on interest from a loan granted to another company. The DGT ruled that while the transaction is exempt from VAT, it does require invoicing and the application of Corporate Tax withholding.
Companies providing loans to other entities must ensure they issue formal invoices for interest earned, even if VAT is not applicable, and correctly apply Corporate Tax withholding requirements.
The tax team reviews your specific situation.
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