8.9 Substantiation requirements
Where you use the otherwise deductible rule, you must have an employee declaration to substantiate the extent to which the interest would have been 'otherwise deductible' to the employee. You must obtain the declaration from the employee before lodging the relevant FBT return or, if you don't have to lodge a return, by 21 May. Where the documentation is a declaration by the employee, it must be in a form approved by the Commissioner.
There is no need to obtain a declaration where the loan:
- is used solely to enable the employee to acquire shares in your company and the shares are owned by the employee throughout the period of the year when the loan is outstanding
- consists of you providing credit for a sale to the employee of goods or services used exclusively in the employee's employment - for example, where you sell protective clothing to an employee on interest-free credit terms.
For a copy of the Loan fringe benefit declaration, refer to Declarations.