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No Change to CRA Prescribed Rate for Q3 of 2012 

Canadian Tax Adviser

 

May 08, 2012

 

The CRA prescribed income tax interest rates for taxable benefits, overpaid taxes and underpaid taxes for the third quarter of 2012 (July 1- September 30, 2012) will remain unchanged.

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

 

Prescribed rates for 2011 and 2012 are as follows:

 

 

KPMG observation
As a result, taxpayers have at least until September 30, 2012 to lock in interest rates on family loans at 1% to secure future income splitting opportunities. The CRA prescribed interest rate will not rise until Q4 of 2012, at the earliest.

 

For more information, contact your KPMG adviser.

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