Interest rate for fringe benefits tax reduced

Tuesday, March 1, 2011

Pretoria - The official rate of interest for calculating fringe benefits will be reduced by 50 basis points to 6.5 percent, with effect from today.

The South African Revenue Service said on Tuesday the reduction was due to amendments to the definition of the "official rate of interest" in the Seventh Schedule to the Income Tax Act, 1962, by section 90 of the Taxation Laws Amendment Act, 2010, coming into effect.

The amended definition of "official rate of interest" provides that the official rate, in the case of a loan denominated in Rand, is equal to the South African repurchase rate plus 1 percent with effect from 1 March 2011.

The current repurchase rate of 5.5 percent plus 1 percent will therefore result in an official rate of 6.5 percent. - BuaNews

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