[Question] Interest received, non-taxable supply or zero rated?

[TanjaWilllemse]

Can anyone help me, I am not sure if interest received is non-taxable supply or zero rated?

[Nickolai Naydenov]

Not sure how to do it as an accountant but in basic terms you have to declare any tax earned, there is an exclusion of R22 800 which you don't pay tax on, the rest gets added to your income and you pay tax accordingly

[Mike C]

Hi Tanja - I presume that we are talking VAT here.

I have always been told that there is no VAT payable on interest paid or received.

As to it being Zero-rated, there are a number of specified items listed in the Pastel tax guide - but interest is not one of them:

The following are, amongst others, specifically zero rated:
brown bread, maize meal, samp, mealie rice, dried maize, dried
beans, lentils, pilchards (excluding pet food or sardines supplied in tins),
milk powder (unflavoured), dairy powder blend, rice, fresh vegetables
(excluding canned, bottled and dehydrated), fresh fruit, vegetable oil used
for cooking (excluding olive oil), milk including long-life milk (excluding
condensed, flavoured, sweetened and evaporated milk), cultured milk,
brown wheaten flour, raw eggs, pod vegetables, diesel, petrol and
illuminating paraffin. Export sales and services are zero-rated, subject to
specific requirements. Supplies from South Africa to an Industrial
Development Zone will be treated as exports

[Mark Atkinson]

Interest is a financial service and therefore exempt from VAT.

Income tax - yes. VAT - no.

[Alfred]

Yes interest is an Exempt Supply. Exempt Supplies include the following: financial services (interest, life insurance, medical schemes, provident pension and retirement annuity funds)
etc.