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What does Deemed Interest mean?

July 17, 2011

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Deemed interest is an adjustment entry used for tax purposes. This kind of interest is considered to have been received even if it was not.

For example if a member of a multinational corporation receives an interest-free loan from an affiliated company, the tax authorities in the lender's country may adjust the lender's profits by adding an amount equal to the interest which would have been payable on the loan.

Are Deemed Interest and Direct Interest same.

its not the same..since direct interest is actually received by the lender while deemed interest is just adjusted...or opted to be

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