The tax and accounting treatment for interest received follows the same rules as those applicable to a term deposit account, and should be well within the expertise of your accountant.
Only realised capital gains are recorded in the accounts; unrealised capital gains are not recognised but require a tax reintegration. The applicable rate is the standard corporate income tax rate of 25%.
Accounting Entries
Deposit of funds:
Debit: Account 503 "Shares" (deposit amount)
Credit: Account 512 "Bank" (deposit amount)
Withdrawal of funds:
Debit: Account 512 "Bank" (total withdrawal amount)
Credit: Account 503 "Shares" (initial deposit amount)
Credit: Account 767 "Net gains on disposal of marketable securities" (capital gains)
Tax Reintegration
At the close of the financial year, unrealised capital gains must be reintegrated for tax purposes on line XR of form 2058-A.
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