Item 2f identifies the gross amounts of loans and advances between international related parties for which no interest component is being charged.
The loans and advances to be shown here include all amounts borrowed between a taxpayer and the related parties. The terms loans and advances are intended to be applied broadly, and to include quasi-equity loans in which no amount of interest was paid or accrued during the year.
The terms are not intended to include trade debtors and creditors who fall within ordinary commercial dealings. However, where trade debtors or creditors that are international related parties are allowed or give terms significantly more generous than those allowed to, or given by, comparable arm's length parties, those terms may constitute interest-free loans or advances. In completing this item, have regard to the terms of trade that are arm's length in your own particular circumstances.
Where you have borrowed amounts or received advances from an international related party or parties, add all the opening balances of these loans or advances and write the sum at K. Add all the closing balances for these loans and enter the total at L.
Where you have loaned or advanced amounts to international related parties, similarly add the opening balances of these loans and enter that total at M. Add the closing balances of the loans or advances and enter this at N.