The LIBOR Rate, London Inter-Bank Offered Rate, is used by ZIMRA in their calculations to determine whether there is a tax benefit on loans given to staff.
A loan benefit arises if the interest charged on any loan received by an employee is less than the LIBOR rate plus 5%. The value of the loan should also be above the specified amount. The value of the LIBOR rates is specified by ZIMRA and is included in the Finance Act. see: London Interbank Offered Rates (LIBOR)
The amount of the benefit is the difference between the interest that would be charged at the LIBOR rate plus 5% and the actual interest charged. Speak to a tax consultant or ZIMRA for advice on what rate to use for LIBOR.
See this link for more information about how to setup the LIBOR rate in the tax settings.
See this link for further information on how to setup the Loan Transaction Code.
See this link and select the heading 'Loans' for further information on how to process a loan for an employee.
See this link and go to 'Step 5' for further information on how to set up the Libor Rate that determines the loan benefit.
See this link for loan reports.
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