Benchmark interest 2018 for cheap or interest free loans to company directors

When a company gives a cheap or interest free loan to an employee or a director, this generates a benefit in kind in the hands of the beneficiary. Therefore, it is crucial to determine the value of this benefit in kind. The tax authorities use the benchmark interest rates which are published annually in the Belgian Official Journal. The percentages are only known after the income year; the benchmark interest rates for 2018 are published last March.

These percentages apply to the benefits in kind granted as from 1 January 2018.

Mortgage loans

Mortgage loans with a fixed interest rate

For mortgage loans with a fixed interest rate the taxable benefit in kind equals the difference between the benchmark interest rate for the year the loan was closed, and the interest rate the borrower actually paid.

The benchmark interest rate changes depending whether or not the loan is secured through a mixed life insurance. For loans closed in 2018 the benchmark interest rate amounts to:

1,80% for loans secured through a mixed life insurance - for 2017 it was 2,13%.

1,70% for other loans - for 2017 it was 2,00%.

Mortgage loans with a floating interest rate

For mortgage loans with a floating interest rate the tax authorities use the benchmark interest rates which are published monthly in the Belgian Official Journal.

Non-mortgage loans

Non-mortgage loans with fixed maturity

For non-mortgage loans with fixed maturity the tax authorities start with the lump sum monthly charge rate or the actual annual charge rate of the year in which the loan was closed to determine the value of the benefit in kind. The monthly charge rate for 2018:

0,05% for car loans.

0,14% for other loans.

Non-mortgage loans without fixed maturity

The benchmark interest rate for non-mortgage loans without fixed maturity amount to 8,94%. This benchmark interest rate is used a. o. for advance on current accounts taken in 2018.

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