The Canada Revenue Agency pays refund interest to taxpayers on the latest of the following dates: a) the date of the actual overpayment; b) the 120th day after the end of the tax year, if the return for the year was filed on time; or, c) the 30th day after the date the return was filed, if it was filed late.
Effective October 1, 2013, the Canada Revenue Agency (CRA) increased the interest rate they charge on late payments. Since April 1, 2009, the CRA has charged an annual interest rate of 5% on outstanding balances, compounded daily. As of October 1, this rate was increased to 6%. The interest rate on refunds has also increased. For corporate taxpayers, the rate has increased to 2%, and for non-corporate taxpayers, the rate has increased to 4%.