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 South African Revenue Service (SARS) hereby notifies for general information that in terms of Government Notice No. R. 256 published in GazetteNo. 23196 of 1 March 2002, the Minister of Finance has, with effect from 1 March 2002, increased the official rate of interest (i.e. fringe benefit interest rate) from 10,5 per cent to 11,5 per cent.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE