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Taxation Determination

TD 97/8

Fringe benefits tax: what is the benchmark interest rate to be used for the fringe benefits tax (FBT) year commencing 1 April 1997?

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FOI status:

may be releasedFOI number: I 1015319

Preamble
This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a 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 1 April 1997 is 7.55 per cent per annum. This rate replaces the rate of 10.50 per cent that has applied for the past year.

2. The rate of 7.55 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.

Example

On 1 April 1997 an employer lends an employee $60,000 for five years at an interest rate of 6% 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 $3,600 (60,000 x 6%). In the current year the taxable value is $930 [ (60,000 x 7.55%) - $3,600 ].

Commissioner of Taxation
16 April 1997

References

ATO references:
NO NAT 96/2491-1; FBT 155

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 94/29
TD 95/20
TD 96/17

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

Legislative References:
FBTAA 11(2)
FBTAA 18
FBTAA 19
FBTAA 136(1)

TD 97/8 history
  Date: Version: Change:
You are here 16 April 1997 Original ruling  
  27 April 2016 Withdrawn  

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