The prescribed rate of interest to calculate fringe benefit tax for low interest, employment-related loans has been raised to 7.5 per cent from 6.7 per cent, Finance Minister Michael Cullen said today.
The rate has been raised because general interest rates have risen. The new rate applies from July 1.
As well,
the deemed rate of return for foreign investment fund interests has increased to 10.46 per cent from 10.29 per cent for the the 2001-2002 year, he said.
The foreign investment fund rules tax New Zealand residents on undistributed profits from investments where they have an interest, but do not control the investment.
The rate, which is set annually, applies to all types of investments, including interests in superannuation schemes and life insurance policies. It is based on an average of five-year government stock rates to which a margin of 4 per cent is added.
- NZPA
