Taxation Determination

TD 98/22A - Addendum

Income tax: under Division 7A of Part III of the Income Tax Assessment Act 1936 ('the Act'), how is the benchmark interest rate used for private company loans to shareholders or associates?

FOI status:

may be released


This Addendum forms part of the Determination but is not a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953. 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.


This Addendum amends Taxation Determination TD 98/22 as follows:

Paragraph 6

Delete the formula for calculating the minimum yearly loan repayment and replace it with:

(Amount of the loan not repaid by the end of the previous year of income * Current year's benchmark interest rate) / remaining term of loan

1 - [1 / (1 + current year's benchmark interest rate)]

(100,000 * 0.067) / [ - [1 /(1 = 0.67]

= 24,193

Commissioner of Taxation
14 April 1999


ATO references:
NO 98/12257-6; 98/10779-7

ISSN 1038 - 8982