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Tax Treatment of Interest/Profit Expense Payable to Banks or FIs during the Moratorium Period

Updated: Mar 12

This Technical Guideline aims to explain the tax treatment on interest/profit expenses payable to banks or financial institutions during the moratorium period.

A moratorium is a temporary suspension of loan/financing repayments (principal and interest/profit) without late payment charges, introduced under the PRIHATIN economic stimulus package to help borrowers facing financial difficulties due to the Covid-19 pandemic.

The moratorium is automatically implemented for individual borrowers and small and medium-sized enterprises (SMEs), while corporate customers can apply for deferment from their respective banks or financial institutions.

The moratorium period given by banks or financial institutions is from April 1, 2020, to September 30, 2020.