CRA tweaks interest rate for corporate taxpayers

The Canada Revenue Agency has announced the prescribed annual interest rates that will apply to any amounts owed to the CRA and to any amounts the CRA owes to individuals and corporations. These rates will be in effect from April 1, 2016 to June 30, 2016.

There have been no changes to the prescribed interest rates since last quarter, except for the interest rate for corporate taxpayers’ pertinent loans or indebtedness.

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Income tax

• The interest rate charged on overdue taxes, Canada Pension Plan contributions, and employment insurance premiums will be 5%.
• The interest rate to be paid on corporate taxpayer overpayments will be 1%.
• The interest rate to be paid on non-corporate taxpayer overpayments will be 3%.
• The interest rate used to calculate taxable benefits for employees and shareholders from interest free and low-interest loans will be 1%.
• Changed: The interest rate for corporate taxpayers’ pertinent loans or indebtedness will be 4.45%.

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