Changes to the limitation on interest deductions
Section 23M applies to taxpayers who pay interest to persons with whom they are in a controlling relationship and in whose hands the interest is not subject to tax in South Africa. The payer’s deduction of such interest is limited. The rules for this limitation were amended significantly in 2021. These amendments take effect when the reduced corporate tax rate starts to apply to a company. This article briefly highlights some changes to the limitation threshold as well as the amounts to which section 23M applies.
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