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Interpretation Note 101 (Issue 2) – Gains or losses on foreign exchange transactions
- 13 July 2023
- International Tax
- SARS
This Note provides guidance on the interpretation and application of section 24I. Section 24I3 deals with the income tax treatment of foreign exchange gains and losses on exchange items as well as premiums or like consideration received or paid in respect of FCOCs entered into and any consideration paid in respect of an FCOC acquired by certain persons.
The tax treatment of transactions denominated in a foreign currency often requires a consideration of section 24I and other provisions of the Act. This Note identifies some of the situations in which one or more of these provisions may apply.
For example, if trading stock, the purchase price of which is denominated in USD, is purchased on credit from a supplier, the provisions of section 25D4 and section 24I are relevant. The income tax treatment of crypto assets is not considered in this Note.
This Note reflects the income tax and tax administration legislation (as amended) at the time of publishing and includes the following:
The Taxation Laws Amendment Act 20 of 2022 which was promulgated on 5 January 2023 (as per Government Gazette 47826).
The Tax Administration Laws Amendment Act 16 of 2022 which was promulgated on 5 January 2023 (as per Government Gazette 47827).
The Rates and Monetary Amounts and Amendment of Revenue Laws Act 19 of 2022 which was promulgated on 5 January 2023 (as per Government Gazette 47825).
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Souce: SARS