Fourth Quarter Prescribed Interest Rates Set

Although CRA will not make the official announcement until later this month, the prescribed annual interest rates for the fourth quarter will remain at the same rates as the prior three quarters. 

The base rate is determined by the average interest rate on 3-month treasury bills for the first month of the previous quarter (July determines the fourth quarter rate), rounded up to the nearest whole percent. These rates will be in effect from October 1, 2014 to December 31, 2014.

The prescribed rates are:

• 5%: The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums
• 3%: The interest rate to be paid by CRA on non-corporate taxpayers’ overpayments
• 1%: The interest rate to be paid by CRA on corporate taxpayers’ overpayments
• 1%: The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans