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.
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