Australia - Commitment Fee Not Treated as Interest
- A. Joseph
- Derivatives & Financial Instruments, 2010 (Volume 12), No 5
- 20 September 2010
The Australian Taxation Office has released an interpretative decision that clarifies the liability of non-resident lenders to withholding tax in Australia when a commitment fee is paid by a resident borrower. According to the decision, no withholding obligation will apply if the payment by the resident is in relation to the commitment by the lender to lend up to a pre-agreed limit.