Fringe benefits tax: what is the benchmark interest rate to be used for the fringe benefits tax year commencing on 1 April 2014?
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1. The benchmark interest rate for the fringe benefits tax (FBT) year commencing on 1 April 2014 is 5.95 per cent per annum. This rate replaces the rate of 6.45 per cent that has applied for the previous FBT year commencing on 1 April 2013.
- a fringe benefit provided by way of a loan; and
- a car fringe benefit where an employer chooses to value the benefit using the operating cost method.
3. On 1 April 2014 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 × 5%). The notional interest, with a 5.95% benchmark rate, is $2,975. The taxable value is $475 ($2,975 - $2,500).
Date of effect
Commissioner of Taxation
26 March 2014
Not previously issued as a draft
fringe benefits tax
FBT benchmark interest rate
loan fringe benefits
car fringe benefits