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Canada: Tax-related interest rates to drop in third quarter 2020

Canada: Tax-related interest rates to drop

Interest rates that apply for tax purposes will be reduced in the third quarter of 2020.


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The Canada Revenue Agency (CRA) announced that the prescribed income tax interest rate for taxable benefits, overpaid taxes, and underpaid taxes will drop by 1% for the third quarter of 2020 (1 July 2020 - 30 September 2020). Read a May 2020 report prepared by the KPMG member firm in Canada

It is estimated that the quarterly rate of interest used to determine the deemed interest income inclusion from a pertinent loan or indebtedness (PLOI) will be reduced to 4.27% (from 5.65%) for the third quarter of 2020 (1 July 2020 - 30 September 2020). This rate is generally the average yield of 90-day Treasury bills sold by the Government of Canada during the first month of the preceding quarter (rounded to two decimal places) plus 4%. Read a May 2020 report prepared by the KPMG member firm in Canada

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