have a client that has a local company who has received a loan from its
offshore holding company. The local company has an unrealised forex loss of
some R21m as a result of this loan. The loan is disclosed as a non-current
we do have to reverse the forex loss as the loan is a long term
liability. If it were a current liability then we would make no adjustment and
they would get the deduction for the forex loss? Please can you confirm whether
I have the correct understanding of the revised S24I(10A) provisions.
A: You are correct that section 24I(10A) does
defer the unrealised forex gains/losses on the debt where it is a non-current
liability for IFRS purposes and conforms to the other requirements
(s24I(10A)(a)(ii) & (iii)). Therefore no tax deduction or inclusion will be
provided for at year end until the year of assessment in which it realises.
Disclaimer: Nothing in this
query and answer should be construed as constituting tax advice or a tax
opinion. An expert should be consulted for advice based on the facts and
circumstances of each transaction/case. Even though great care has been taken
to ensure the accuracy of the answer, SAIT do not accept any responsibility for
consequences of decisions taken based on this query and answer. It remains your
own responsibility to consult the relevant primary resources when taking a
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