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CRA Prescribed Rate Drops Back Down to 1% for Q1 of 2014 

Canadian Tax Adviser

 

November 05, 2013

 

The CRA prescribed income tax interest rates for taxable benefits, overpaid taxes and underpaid taxes for the first quarter of 2014 (January 1 - March 31) will all decrease by 1% as of January 1, 2014. As a result, taxpayers who did not lock in interest rates on family loans at 1% before October 1, 2013 now have another chance to do so beginning January 1, 2014. Family loans entered into after September 30, 2013 and before January 1, 2014 are subject to the 2% prescribed rate.

The rate for penalties and interest on overdue income taxes will decrease to 5% (from 6%). The prescribed rate for refunds of overpaid tax will decrease to 3% (from 4%) for non-corporate taxpayers and 1% (from 2%) for corporate taxpayers. In addition, the prescribed rate that applies to taxable benefits for employees and shareholders from interest-free and low-interest loans will decrease to 1% (from 2%).

 

Prescribed rates for 2013 and 2014 are as follows:

 

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For more information, contact your KPMG adviser.

 

 

 

 

 

 

Information is current to November 05, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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