The Taxation Laws Amendment Act of 2015 ("Amendment
Act") was promulgated on 8 January 2016 and contains
a number of legislative changes to the Income Tax Act, 58 of 1962
("the Act").
The Amendment Act contains some long awaited amendments to the
provisions which regulate the interest withholding tax
("IWT"). This article examines two of
the more important changes which should be borne in mind by parties
affected by the IWT.
Defining the concept of "interest"
Although the IWT only came into effect on 1 March 2015, various
iterations of the draft legislation have been in circulation since
2010. The IWT provisions which came into effect on 1 March 2015 did
not contain a definition of "interest" to which the IWT
applies. The question arose whether the IWT is
imposed on the payment of common law interest (generally
consideration paid for the use of money), or whether the
IWT is imposed on "interest" as defined in section
24J of the Act. In the absence of a
