RSA: SARS official rate of interest increase effective 1 April 2022
In terms of
Section 1(1) of the Income Tax Act, the ‘official rate of interest’
means a rate of interest equal to the South African repurchase rate plus 100
basis points. Provided that where a new repurchase rate is determined, the new
official rate of interest applies from the first day of the month following the
date on which that new repurchase rate came into operation.
Where a
loan is obtained by an employee from his employer and either no interest is
payable or the interest payable is less than the “official rate of interest”,
the difference between the amounts calculated at the official rate of interest,
and the amount calculated at the interest rate applied by the employer, is a
taxable fringe benefit. The fringe benefit value must be processed in the
payroll and reported on the tax certificate against the general fringe benefits
SARS Source Code 3801.
The RSA
Repurchase rate increased from 4.00% to 4.25% effective 25 March 2022.
The SARS official rate of interest will increase
from 5.00% to 5.25% effective 1 April 2022.
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