News release

Interest rates on overdue and overpaid income taxes set for the third calendar quarter

OTTAWA, June 16, 1998...Revenue Canada today announced that the prescribed interest rate on income tax refunds and overpayments for the third calendar quarter will be 7%, while the rate on overdue income taxes and other arrears will be 9%. These rates will be in effect from July 1 to September 30, 1998.

The Department calculates the prescribed rates for a calendar quarter by establishing the average rate on 90-day treasury bills sold during the first month of the preceding quarter. This figure is rounded up to the nearest percentage point.

To determine the interest rate for all refunds and overpayments, the Department adds two percentage points to the rounded-up average rate. It adds four percentage points to determine the rate for all overdue taxes, penalties, interest, insufficient instalment payments, as well as unpaid employee tax deductions, Canada Pension Plan contributions and Employment Insurance premiums.

From July 1 to September 30, 1998, the prescribed rate that applies to taxable benefits for employees and shareholders from interest-free and low-interest loans will be 5%.

Revenue Canada national news releases and fact sheets are available on the Internet at: http://www.rc.gc.ca

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