Updates to rates for UOMI and FBT on low-interest loans

Two Orders in Council have been made updating the rates for use of money interest and also for the rate for calculating fringe benefit tax on employer-provided, low interest loans respectively.

The new underpayment rate for use of money interest is 9.21% (previously 7.96%). The new overpayment rate is 2.31% (previously 1.22%). These will apply on and after 17 January 2023.

The new prescribed rate of 6.71% for calculating fringe benefit tax on employer-provided loans applies for the quarter beginning 1 January 2023 and subsequent quarters.

Inland Revenue has published special reports detailing the changes ahead of coverage in an upcoming edition of the Tax Information Bulletin.