Tag: Withholding tax on interest

The South African Revenue Service (SARS) issues Arm's Length Guidance on Intra-Group Loans

The South African Revenue Service (SARS) issues Arm’s Length Guidance on Intra-Group Loans

/ Bank opinion, Covenants, Credit default swaps, Credit rating, Interest, Intra-group loan, Lender’s and borrower’s perspectives, Loan, Loan guarantee, Local Country Guidelines, Risk-adjusted rate of return, Risk-free rate of return, South Africa, Transfer Pricing Library, Transfer Pricing News, Withholding tax on interest
17 January 2023 the South African Revenue Service (SARS) released an interpretation note (IN 127) titled “DETERMINATION OF THE TAXABLE INCOME OF CERTAIN PERSONS FROM INTERNATIONAL TRANSACTIONS: INTRA-GROUP LOANS” which provides guidance on how SARS will determine arm’s length pricing for intra-group loans. The Note also provides guidance on the consequences for a taxpayer if the amount of debt, the cost of debt or both are not arm’s length. According to the note an intra-group loan would be incorrectly priced if the amount of debt funding, the cost of the debt or both are excessive compared to what is arm’s length. Legal-IN-127-Determination-of-the-taxable-income-of-certain-persons-from-international-transactions-Intra-group-loans ... Read more