Fringe benefits tax: what is the benchmark interest rate to be used for the fringe benefits tax year commencing on 1 April 2016?
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1. The benchmark interest rate for the fringe benefits tax (FBT) year commencing on 1 April 2016 is 5.65 per cent per annum. This rate remains the same as that which had applied for the previous FBT year commencing on 1 April 2015.
- 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 2016 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 5.65% benchmark rate, is $2,825. The taxable value is $325 ($2,825 - $2,500).
Date of effect
Commissioner of Taxation
30 March 2016
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