New Draft Interpretation Note on Intra-group Financial Transactions brings welcome clarity
SARS has released a new draft interpretation note that will help to clarify issues around intra-group loans, but several key issues still need to be addressed Debt is an important source of financing for investment. However, intra-group financial assistance can create opportunities for base erosion and profit shifting. Base erosion profit shifting (BEPS) refers to tax planning strategies used by multinational enterprises to "shift" profits from a higher-tax to a lower-tax jurisdiction, which results in loss for the tax base of the higher-tax jurisdiction.
Source: polity.org.za