Taxation Determination

TD 1999/2

Fringe benefits tax: what is the benchmark interest rate to be used for the fringe benefits tax (FBT) year commencing on 1 April 1999?

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FOI status:

may be releasedFOI number: I 1018404

The number, subject heading, date of effect and paragraph 1 of this Taxation Determination are a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and are legally binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain when a Determination is a public ruling and how it is binding on the Commissioner.
Date of Effect
This Determination applies for the FBT year commencing on 1 April 1999. However, it does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).

1. The benchmark interest rate for the FBT year commencing on 1 April 1999 is 6.50 per cent per annum. This rate replaces the rate of 6.70 per cent that has applied for the previous year.

2. The rate of 6.50 per cent is used to calculate the taxable value of:

a fringe benefit provided by way of a loan;
a car fringe benefit where an employer chooses to value the benefit using the operating cost method.


On 1 April 1999 an employer lends an employee $50,000 for five years at an interest rate of 5% per annum. Interest is charged and paid 6 monthly and no principal is repaid until the end of the loan. The actual interest payable by the employee for the current year is $2,500 (50,000 x 5%). In the current year the taxable value is $750.00 [ (50,000 x 6.50%) - $2,500 ].

Note: FBT does not apply to a loan in relation to a shareholder in a private company, or an associate of such a shareholder, that causes (or will cause) the private company to be taken under Division 7A of Part III of the Income Tax Assessment Act 1936 to pay the shareholder or associate a dividend.

Commissioner of Taxation
28 April 1999

No draft issued


ATO references:
NO 95/2491-1
BO FBT 155

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 94/29
TD 95/20
TD 96/17
TD 97/8
TD 98/6
TD 98/22

Subject References:
car fringe benefits
FBT benchmark interest rate
fringe benefits tax
loan fringe benefits

Legislative References:
FBTAA 11(2)
FBTAA 136(1)
ITAA Part III Div 7A

TD 1999/2 history
  Date: Version: Change:
You are here 28 April 1999 Original ruling  
  4 May 2016 Withdrawn