Normal interest rate for the taxation of low-cost loans from an employer


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The benefit of a low-interest loan within an employment relationship is currently taxed using a normal interest rate which is set by the Directorate of Taxes, six times a year.

The rate applies for the income year 2014

If you need rates for the tax return, you must check the rates for 2016

By "income year", we mean the year in which the income or expense arises. The rates for the income year are used in the tax return and tax calculation.

By "assessment year", we mean the year after the income year and in which the tax return for the income year must be submitted/checked and the tax calculated.

Normal interest rate for January and February 2014 2.25%
Normal interest rate for March and April 2014 2.75%
Normal interest rate for May and June 2014 2.75%
Normal interest rate for July and August 2014  2.75% 
Normal interest rate for September and October 2014  2.75%
Normal interest rate for November and December 2014 2.50%

The Ministry of Finance can set the normal interest rate on up to six occasions per year: 1 January, 1 March, 1 May, 1 July, 1 September and 1 November. The rate for the forthcoming period must be determined during the first week of the previous period, i.e. the rate for March and April is set in the first week of January.

The normal interest rate is set on the basis of the arithmetic mean of the observed interest rate on treasury bills over an observation period of two months commencing on the 1st day of each of the months of January, March, May, July, September and November. The calculation period of two calendar months follows on after the end of the observation period. During the first week of the calculation period, the Ministry of Finance determines the normal interest rate that will apply to the period after the end of the calculation period. The normal interest rate must only be altered if the trend in the mean interest rate suggests a change in the normal interest rate of 1/4 of a percentage point.

The normal interest rate amounts to the mean interest rate plus a surcharge of 1.25 percentage points.

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