USA: Interest rates on tax over- or underpayments

In the USA interests will be charged by the tax authorities for underpayments. Underpayments  can be the result of tax assessments or late payments. On the other hand interests will be refunded für overpayments (tax refunds). The Internernal Revenue Service (IRS) publishes interest rates on a regular basis. For the third quarter 2015 interest rates are published in the Revenue Ruling 2015-12.

The interest rates for the third quarter, beginning July 1, 2015 are es follows:

• 3% for non-corporate overpayments
• 2% for corporate overpayments up to US-$ 10,000
• 0.5% for corporate overpayments in excess of US-$ 10,000
• 3% for all underpayments (other than large corporate underpayments)
• 5% for large corporate underpayments (underpayments in excess of US-$ 100,000)

Note: In Germany the interest rate on over- and underpayments is 0.5% per month resulting in a annual interest rate of 6%. However, there are special rules for taxes which are assessed on a yearly basis.

Author: Peter Scheller, German Tax Adviser – Master of International Taxation

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