Announcements
PUBLISHED 26 May 2003

Deemed rate of return, FBT rate for low-interest loans decrease

The deemed rate of return for foreign investment fund interests has decreased from 10.46% to 9.90% for the 2002-03 income year, and the interest rate used to calculate fringe benefit tax for low-interest, job-related loans drops from 7.83% to 7.74% with effect from 1 April 2003. The changes were made by Order in Council today. For more information see the government's media statements:


Hon Dr Michael Cullen
Minister of Revenue

MEDIA STATEMENT

Drop in deemed rate of return for foreign investment fund interests

The deemed rate of return for foreign investment fund interests has dropped from 10.46 per cent to 9.90 per cent for the 2002-03 income year, Revenue Minister Michael Cullen announced today.

The foreign investment fund rules tax New Zealand residents on undistributed profits arising in foreign entities in which they have invested but do not control.

The deemed rate of return, 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.

Contact: Patricia Herbert [press secretary] 04-471-9412 or 021-270-9013. E-mail [email protected]


Hon Dr Michael Cullen
Minister of Revenue

MEDIA STATEMENT

FBT rate for low-interest, job-related loans down

The prescribed rate used to calculate fringe benefit tax for low-interest, employment-related loans has dropped from 7.83 per cent to 7.74 per cent, Revenue Minister Michael Cullen announced today.

The new rate applies from 1 April 2003.

The rate is reviewed regularly to ensure it is in line with the results of the Reserve Bank's regular survey of first mortgage interest rates.

It was last changed with effect from 1 October 2002.

Contact: Patricia Herbert [press secretary] 04-471-9412 or 021-270-9013. E-mail [email protected]