Yearly or annual interest

Obligations under ITA07/S874

Although it does not relate directly to transfer pricing, guidance on the obligation arising from the payment of annual interest and the implications of not observing them is included here because borrowers regularly fail to withhold and lenders omit to apply for clearance. The size of the loans and the time the failure to withhold remains undetected may create significant liabilities to interest under TMA70/S87.

ITA07/S874, which replaced ICTA88/S349, imposes the obligation to deduct and account for income tax on yearly interest paid in certain circumstances. The effect of the legislation remains unchanged.

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