The South African Revenue Service (SARS) has published updated interest rate tables dated 13 September 2022, including:
The rates for Tables 1 and 2 are linked to the rate determined in terms of section 80(1)(b) of the Public Finance Management Act, 1999 (PFMA), the standard interest rate on debts owing to the State. The PMFA rate was most recently increased from 8.25% to 9.0% from 1 September 2022, but for income tax purposes the rate only becomes effective from the first day of the second month following the date on which the PFMA rate comes into operation (i.e., 1 November 2022).
SARS also published an updated interest rate Table 3 dated 26 September 2022 regarding the rates at which interest-free or low-interest loans are subject to income tax, which is increased from 6.50% to 7.25% from 1 October 2022 (previously increased from 5.75% to 6.50% from 1 August 2022).
Note - A taxable benefit (fringe benefit) arises if an employee incurs a debt in favor of the employer, or 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.