The Canada Revenue Agency (CRA) recently announced the prescribed interest rates that apply to amounts owed to the CRA and to amounts the CRA owes to individuals and corporations. The rates are subject to change every calendar quarter. These rates are in effect from April 1, 2018 to June 30, 2018. The rates increased by one percentage point for the first time since 2013, and for only the second time since 2009.
- The annual interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums is 6%.
- The interest rate paid on refunds (late payments by the CRA) to corporations is 2%.
- The interest rate paid on refunds to other taxpayers is 4%.
- The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans, as discussed above, is 2%.