The Minister of Finance has approved a decrease in the official rate of interest from 14,5 per cent to 13 per cent with effect from 1 July 2003.
The fringe benefit provisions contained in the Income Tax Act, 1962, provide that where a loan is obtained by an employee from his or her employer in terms of which no interest is payable or where the interest payable is less than the "official rate of interest", the difference between the amount which would have been payable if the loan was granted at the official rate and the amount actually paid by the employee, will be taxed as a fringe benefit.
The Government Notice giving effect to the decrease of the official rate of interest has been signed by the Minister of Finance and published on 1 July 2003 in Gazette No. 25146 of 1 July 2003
The government notice has also been published on the SARS website http://www.sars.gov.za and can be accessed under Legislation/Regulations and Government Notices/Income Tax /Regulations/Notices.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE