South Africa: Reduced interest rate for taxation of interest-free or low-interest loans

Effective June 1, 2025

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August 19, 2025

The South African Revenue Service (SARS) published an updated interest rate Table 3, reducing the official interest rate for taxation of interest-free or low-interest loans from 8.50% to 8.25%, effective June 1, 2025.

This adjustment follows the Reserve Bank's Monetary Policy Committee decision to cut the repo rate by 25 basis points on May 30, 2025, and affects the taxable fringe benefit calculation for employees with such loans.


For more information, contact a KPMG tax professional in South Africa:

Lesley Bosman | lesley.bosman@kpmg.co.za

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