South Africa: Transfer pricing implications of transition to ZARONIA as key reference

Replacing JIBAR with ZARONIA in related party financial arrangements expected to result in an arm’s length rate.

The South African Reserve Bank in November 2025 introduced the South African Rand Overnight Index Average Rate (ZARONIA) as a replacement for the Johannesburg Interbank Average Rate (JIBAR) as the key reference interest rate for Rand-denominated financial contracts.

JIBAR has served as a trusted benchmark for setting interest rates in financial arrangements between connected persons in South Africa, helping compliance with transfer pricing and tax regulations by providing a market-based reference point. It is expected that replacing JIBAR with ZARONIA in related party financial arrangements will also result in an arm’s length rate and will not result in any unintended tax consequences. However, multinational enterprise (MNE) groups need to update documentation to reflect the withdrawal of JIBAR and otherwise provide that any amendments to financial instruments between connected persons remain compliant.

Read a February 2026 report prepared by the KPMG member firm in South Africa

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South Africa: Transfer pricing implications of transition to ZARONIA as key reference

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