Effective from YA 2014, it is proposed that a Company is deemed to have gross income consisting of interest from loan or advances to directors.

The interest income is calculated based on the formula :-

1/12  x  A  x  B 

A      is the total amount of loan or advances outstanding at the end of the calendar month;

B      is the average lending rate of commercial banks published by the Central Bank at the end of the calendar month or

        where no such average lending rate, such other reference lending rate as may be prescribed by the Director General.

If a Company actual interest charged is higher than the total sum of deemed interest, the above formula is not applicable.