The Canada Revenue Agency (CRA) today 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 corporations.

Income tax

• The interest rate charged on overdue taxes, Canada Pension Plan contributions, and employment insurance premiums will be 5%.
• The interest rate to be paid on corporate taxpayer overpayments will be 1%.
• The interest rate to be paid on non-corporate taxpayer overpayments 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%.
• The interest rate for corporate taxpayers’ pertinent loans or indebtedness will be 4.94%.

These rates are in effect from October 1, 2014 to December 31, 2014.

A comprehensive benefits program is a major component of any organization’s compensation package. It provides protection for an employer’s most important assets, its employees, and helps to attract top candidates in today’s competitive employment marketplace.

European Central Bank surprised the market with a cut to its key interest rate and deposit rate. In a bid to stimulate a flagging Euro-zone economy, the benchmark rate was cut by 10bps to a record low of 0.05%, from a previous 0.15%, and the rate at which the central bank charges large institutions to park up cash moved to -0.2% from -0.1% (deposit rate). President Draghi also announced a program of bond purchases from the private sector on both asset backed securities and covered bonds, to add further liquidity.