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South Africa: Proposed changes to foreign exchange loss carryforward rule for non-trading companies

Non-trading companies would be allowed to carry forward aggregate foreign exchange losses

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October 31, 2024

The 2024 Taxation Laws Amendment Bill, tabled in Parliament on October 30, 2024, introduces changes to section 24I of the income tax law, which deals with the taxation of foreign exchange gains and losses for companies not carrying on a trade.

Currently, such companies are taxed on all foreign exchange gains but cannot carry forward foreign exchange losses to subsequent years. The legislation proposes a new section 24I(3A), under these companies would be allowed to carry forward foreign losses to be reconsidered in future calculations.

This amendment would take effect on January 1, 2025, for years of assessment starting on or after that date. Until then, companies not carrying on a trade must follow the existing rules, which do not allow for the carry forward of foreign exchange losses.

Read an October 2024 report prepared by the KPMG member firm in South Africa

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