SARS Updated Table 3 Interest Rates for Interest-Free or Low Interest Loans
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What’s New?
On 6 August, SARS updated the rates under Table 3. Rates at which interest-free or low interest loans are subject to income tax under the Income Tax Act.
Table 3. Rate is changing as follows:
From 1 June – 31 August 2025: 8.25% per annum
From 1 September 2025: 8.00% per annum.
Use-case for accountants
Calculate interest on late tax payments.
Estimate interest on refunds on appeals or delayed payouts.
Instalment payment arrangements with SARS: if clients agree to pay a tax debt over time, the outstanding balance accrues interest at the Table 3 rate.
Action Points
Update your interest calculators to reflect the new rates in your models and systems. Apply the correct rates when calculating interest owed to taxpayers for overpaid provisional tax.
Review client positions, check who is owed interest or liable for overpayment penalties.
Anticipate changes after SARS adjusts the PFMA-linked rate later in 2025.
Read more on the Tables of Interest rates o the SARS website.
