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  • Writer's pictureDavid Mu

What Will CRA's Corporate Tax Instalment Interest Rate for 2024 Be?





As the new fiscal year unfolds, Canadian corporations must be aware of the Canada Revenue Agency's (CRA) updated interest rates for corporate tax instalment payments. For Q1 of 2024, the CRA has set the interest rate for overdue corporate tax instalments at 10%. This figure is a composite of the prescribed rate, which is 6%, plus an additional 4%.

Corporate tax instalments are payments made by corporations throughout the year to cover estimated taxes owed, rather than paying a lump sum at the end of the year. While this approach helps manage cash flow, it also carries the risk of interest charges if these instalments are paid late or are less than the CRA's requirements.

The prescribed rate, determined quarterly, is reflective of economic conditions and the Government of Canada's Treasury Bills. The instalment interest rate is therefore a signal of both fiscal policy and market trends.

The 10% rate underscores the importance of accurate tax forecasting and timely payments. Corporations are encouraged to review their instalment schedules and amounts to prevent incurring unnecessary costs. Moreover, for any overpayments made, the CRA has set the corporate taxpayer overpayment rate at 6%, offering a modicum of relief.

To navigate these financial responsibilities, corporations should consider seeking guidance from tax professionals and stay updated with the CRA's announcements on interest rates each quarter.

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For the most current rates and detailed information, corporations should consult the CRA's prescribed interest rates page.

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