SARS official rate of interest increase effective 1 June 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 4.25% to 4.75%
on 20 May 2022.
The SARS official rate of interest will increase from 5.25% to 5.75%. The effective date will be 1 June 2022.
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