Interest Rates

SARS has published the December 2022 edition of the Interest Rate Table (Table 3), relating to the rates at which interest-free or low interest loans are subject to income tax.

The term “official rate of interest” is defined in section 1(1) of the Income Tax Act 58 of 1962 (the Act) and is linked to the repurchase rate (currently 7%) plus one per cent. The official rate is adjusted at the beginning of the month following the month during which the Reserve Bank changes the repurchase rate.

As the South African Reserve Bank changed the “repo rate” on 25 November 2022, the official rate, as shown in Table 3, was updated with effect from 1 December 2022 until the next change in the “repo rate”. 

Find a copy of Table 3 here.

This rate finds application in the cases of:

  • Section 7C – loan, credit or advance to trusts or companies partly owned by trusts;
  • Section 64E(4) – interest free or low interest loans on loans to shareholders;
  • Paragraph 11 of the 7th schedule to the Income Tax Act – interest free or low interest loans on loans to employees.

07/12/2022