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Withholding tax on interest on loan from foreign entity
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2014/03/12 at 07:25:19 AM GMT
Posts: 2
Withholding tax on interest on loan from foreign entity

I'm hoping somebody can help provide clarity on the withholding tax on interest paid to a foreign entity:

A BBI company based in Monaco has a rand based registered shareholders loan with the reserve bank to loan money to a SA PTY LTD company: The question is: Is there withholding tax on the interest raised on the loan when paid to a foreign entity?

MG Lustgarten

2014/03/13 at 04:59:43 PM GMT
Posts: 56
Withholding Tax on Interest
S50A of the Income Tax Act provides for withholding tax of 15% on interest paid to any foreign person with effect from 01 January 2015. Also refer Explanatory memorandum(dd 10/12/2012) to Taxation Laws Amendment Bill under paragraph 5.5 on page 113 for more background information.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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