Interest-Free or Low Interest Loans

Rules of Application

• Where interest free or low interest loans are made available to employees or shareholders.

Computation of Benefit

• Outstanding loan x prescribed interest rate = taxable benefit.

• Reduce by any amount paid by the employee.

• No GST/HST or QST applicable.

• Prescribed interest rates:

• Jan 1 – Mar 31 5%
• Apr 1 – Jun 30 5%
• Jul 1 – Sep 30 5%
• Oct 1 – Dec 31 5%