South Africa: South African Revenue Service Updates Interest Rate Tables
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The South
African Revenue Service (SARS) published updated interest rate tables on 18
January 2022, including:
Table 1 - Interest rates charged on
outstanding taxes, duties, and levies and interest rates payable in
respect of refunds of tax on successful appeals and certain delayed
refunds, which is increased from 7.0% to 7.25% with effect from 1 March
2022 (previously reduced from 7.25% to 7.0% from 1 November 2020); and Table 2 - Interest rates payable on
credit amounts (overpayment of provisional tax), which is increased from
3.00% to 3.25% from 1 March 2022 (previously reduced from 3.25% to 3.00%
from 1 November 2020).
SARS also
published an updated interest rate Table 3 on 28 January 2022 regarding the
rates at which interest-free or low-interest loans are subject to income tax,
which is increased from 4.75% to 5.00% with effect from 1 February 2022
(previously increased from 4.50% to 4.75% from 1 December 2021).
A
taxable benefit (fringe benefit) arises if an employee incurs a debt in favor
of the employer, any other person by arrangement with the employer, or an
associated institution in relation to the employer, if no interest is payable
or if the interest payable is less than the "official rate of
interest" as provided in Table 3. The difference between the amount
which would have been payable if the debt had incurred interest at the
official rate, and the interest actually paid by the employee, is taxed as a
fringe benefit.
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