IMPLEMENTATION LEVEL
NationalAFFECTED FLOW
InflowANNOUNCED AS TEMPORARY
NoNON-TRADE-RELATED RATIONALE
NoELIGIBLE FIRMS
allJUMBO
NoTARIFF PEAK
NoPost-migration treatment
With effect from 1 March 2015, the South African government introduced a withholding tax on interest payments to foreign creditors. The withholding tax on interest (WTI) will be levied at a rate of 15%. To claim a reduced rate of tax in terms of a double taxation agreement, a declaration has to be submitted.
The WTI is only applied to interest owed to foreign creditors. Thus, the measure can be considered discriminatory since foreign loan providers are put at a cost disadvantage compared to their South African counterparts.
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