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. 278 published in Gazette No. 24938 of 28 February 2003, the Minister of Finance has, with effect from 1 March 2003, increased the official rate of interest (i.e. fringe benefit interest rate) from 13,5 per cent to 14,5 per cent.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE