Taxation Determination
TD 2014/5
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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Preamble
![]() This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. |
Ruling
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.
2. The rate of 5.95 per cent is used to calculate the taxable value of:
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- a fringe benefit provided by way of a loan; and
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- a car fringe benefit where an employer chooses to value the benefit using the operating cost method.
Example
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
4. This Determination applies to the FBT year commencing on 1 April 2014.
Commissioner of Taxation
26 March 2014
Not previously issued as a draft
References
ATO references:
NO 1-593QD9Z
Previous Rulings/Determinations:
TD 94/29
TD 94/29
TD 95/20
TD 96/17
TD 97/8
TD 98/6
TD 1999/2
TD 2000/19
TD 2001/4
TD 2002/13
TD 2003/8
TD 2004/12
TD 2005/8
TD 2006/24
TD 2007/10
TD 2008/7
TD 2009/10
TD 2010/6
TD 2011/6
TD 2012/7
TD 2013/8
Subject References:
fringe benefits tax
FBT benchmark interest rate
loan fringe benefits
car fringe benefits
Legislative References:
ITAA 1936 Pt III Div 7A
TAA 1953
Date: | Version: | Change: | |
You are here | 26 March 2014 | Original ruling | |
25 March 2020 | Withdrawn |
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