CBDT Notifies new Safe Harbour Rules for Intra Group Loans

 Central Board of Direct Tax (CBDT), on 19th December 2023, notifies new Safe Harbour Rules for Intra Group Loans via Notification No. 104/2023/ F. No. 370142/26/2023-TPL, thereby amending the clause (f) of Rule 10TA and serial number (4) and (5) of sub rule (2A) of Rule 10TD.

Main Para in the Notification is insertion of Explanation, defining the term "Reference Rates":

1. For US Dollar- 6-month Term Secured Overnight Financing rate (SOFR)
2. for Euro, 6-month Euro Inter Bank Offered Rate (EURIBOR)
3. for UK Pound Sterling, 6-month Term Sterling Overnight Index Average (SONIA)
4. for Japanese Yen, 6-month Tokyo Term Risk Free Rate (TORF)
5. for Australian dollar, 6-month Bank Bill Swap Rates (BBSW)
6. for Singapore dollar, 6-month Compounded Singapore Overnight Rate Average (SORA)

Therefore, the Interest Rate should not be less than the reference rate of the relevant foreign currency as on 30th September of the relevant previous year plus certain basis points as prescribed in amended rule.

A welcome notification by the CBDT providing more clear guidance regarding the chargeability of Interest Rates on Intra Group loans provided to Associated Enterprises denominated in different foreign currencies.