PRESCRIBED INTEREST RATES

CRA has announced the prescribed rates for the third quarter, July 1 to September 30, 2012. The following rates apply:

• Interest charged on overdue taxes – 5%
• Interest paid on overpaid corporate tax – 1%
• Interest paid on overpaid personal tax – 3%
• Interest calculated on taxable benefits for shareholders and employees – 1%

US TAX REPORTING FOR CANADIANS

In a recent development, Ottawa has announced that it has opened negotiations with the IRS to reduce the compliance requirements for US tax filers living in Canada. Earlier this year the deadline for some reporting requirements was delayed to 2016 in response to a plethora of complaints from foreign institutions.

It should be noted that these delays in reporting requirements and the accompanying negotiations affect only financial and other reporting institutions but do not extend to individual reporting requirements.

IRS ANNOUNCES NEW AMNESTY FOR NON-RESIDENT US TAXPAYERS

It appears that the IRS is facing problems because of the draconian measures they have taken concerning non-resident US taxpayers. A new amnesty effective September 1, 2012 will require the filing of 3 year’s returns and six years of FBAR along with an explanation as to the reason that the returns and forms had not been filed. They will also allow a retroactive election to defer the tax on RRSPs.

They have not yet announced how long this program will last or what is the consequence for those who have already filed in advance of September 1.