previous
next

(b) Interest

43. Interest on Bonds.1 — Interest on bonds issued by N.E.I. companies are not taxed when received by a non-resident enterprise unless, as has been described above in connection with dividends, the non-resident enterprise has in N.E.I. a business which invests its reserve funds or cash in such bonds.

note

44. Interest on Secured Loans. — When loans made by non-residents are secured by mortgage or otherwise on immovable property situated in N.E.I., the interest is taxable as from January 1st, 1933 (Income-Tax Ordinance, 1932, Article 2 (b) and a similar amendment to the Company-Tax Ordinance 1932, both effective January 1st 1933). The creditor is required to declare this income, together with his other taxable income from N.E.I., and pay tax thereon at the rate applicable to individuals or companies according to the status of the taxpayer.

45. Interest on Unsecured Loans. — Interest on unsecured loans paid by a local company to a foreign enterprise and interest on bank deposits are not taxable unless they constitute income from an investment of reserve funds or cash of the business in N.E.I. as described above in paragraph 43.

46. Interest on capital invested by non-resident limited partners in a N.E.I. partnership is considered taxable income on the same basis as other profits derived from such partnership.

previous
next