The short answer is that some are. It depends on the purpose of the cash loan, whether it is for personal or business reasons, and whether you are the lender or borrower.
Taxation is a very, very complicated topic so we’ll try to keep this as simple as possible. If you need expert advice we recommend contacting the IRD or other tax specialist professional.
Taxes are collected on income, both personal and business, and on the supply of goods and services (GST). This means everyone is required to pay tax on whatever they earn. This can be through salary and wages, business or self-employment income, investment interest and dividends, rental income, and anything you earn from overseas.
If you were to loan someone cash and charge them interest you would be expected to pay tax on the interest amount you receive back because this would be considered income.
If you borrow money and use it to earn interest (say you put it in a bank account on term deposit) you would be expected to pay tax on that too – this is called resident withholding tax (RWT).
If you borrow money for a taxable activity – this is defined by s6(1) of the GST Act 1985 as an activity that is carried on continuously or regularly, but in laymens terms means ‘for business’ – you could potentially claim back tax on the interest you pay.
You do not have to pay tax when you get a cash loan; this is not considered a source of income because you will be paying fees and interest on it. The lender, however, would be expected to pay tax on the interest they get back because this is their income.
No, if we loan you $100 cash, $100 is what you get.
No, is the most likely answer. As we said above, if you are borrowing money for something business related you could - depending on where you borrowed the money from - claim back tax on the interest as a business expense.
It’s highly unlikely we would lend for business purposes. At Moola we are big on responsible lending. One of the things we’ll ask you is why you’re applying for the short term loan. This is a legal requirement so that we can ensure it’s the best option for you. Our aim is to help everyday Kiwis out with temporary cash flow problems, like a bill that needs to be paid before next pay day for example.
If it’s time for you to get a fast little loan online, have a read of our Q&A page first so you know all the ins and outs of the process. Then head to the homepage and design the loan you need using our handy loan calculator.
If you’ve never had a Moola cash loan you’ll love how easy it is to apply and how fast you’ll get the money in your bank account. As long as you’re a New Zealand citizen or resident who’s over 18, not bankrupt, have a job, a cellphone, a bank account, an email address and access to a computer, you’re probably eligible.
We like to start off easy though; with a smaller cash loan amount first time around. But after that, depending on your net income per week, you can borrow up to $1000. We’ll never let you get in over your head though, we’ll only lend you up to 30% of your income. We can check this when we contact your employer or payroll to confirm your details.