Plain meaning
A rate set for several tax purposes, including CRA arrears, overpayments, taxable benefits, and certain related-party loan rules.
Also called
CRA prescribed interest rates
prescribed interest rates
Key points
- CRA announces prescribed rates quarterly, and different rates can apply to overdue amounts, overpayments, and taxable benefits.
- The arrears rate can make unpaid tax balances grow even when the underlying tax amount does not change.
- The taxable-benefit rate can affect interest-free or low-interest loans to employees or shareholders.
- GST/HST, payroll, income tax, and other remittance obligations can all be affected by prescribed interest rules.
- Readers should check the effective quarter because prescribed rates can change several times in a year.
Why it comes up
Quarterly prescribed-rate changes can affect overdue taxes, refunds, GST/HST remittances, shareholder loans, employee loans, and other tax balances.