Prescribed Rates - Changes for Corporations Now in Effect
The third quarter prescribed rates have been announced by CRA and are continuing with the lowest prescribed rates in recent history - a 1% rate for certain taxable benefits and loans. The biggest change is the interest rate paid to corporate taxpayers on overpayments, reduced to 1% from the 3% being paid to non-corporate taxpayers per the March 2010 Federal Budget (subject to Royal Assent).
The Canada Revenue Agency 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 corporate and non-corporate taxpayers. These rates are calculated quarterly in accordance with applicable legislation and will be in effect from July 1, 2010, to September 30, 2010.
Income tax
- The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance Premiums will be 5%.
-
The interest rate paid on overpayments by corporate taxpayers will be 1%.
-
The interest rate paid on overpayments by non-corporate taxpayers 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%.
Other taxes
The interest rate on overdue and overpaid remittances for the following taxes will be:
|
Tax and Duty |
Overdue remittances |
Overpaid remittances
Corporate/Non-Corporate |
|
GST |
5% |
1% / 3% |
|
HST |
5% |
1% / 3% |
|
Air Travellers Security Charge |
5% |
1% / 3% |
|
Excise Tax (non GST) |
5% |
1% / 3% |
|
Excise Duty (except Brewer Licensees) |
5% |
1% / 3% |
|
Excise Duty (Brewer Licensees) |
3% |
N/A |
|
Softwood Lumber Products Export Charge |
5% |
1% / 3% |
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