Making and Managing Advance Deposits

If you are a business and anticipate a reassessment for a previous tax year, you may choose to make an advance deposit with the Canada Revenue Agency (CRA) in order to reduce interest charges.

When a reassessment is processed, interest is charged on any balance owing. You can reduce these interest charges by making a payment in advance (advance deposit) that is sufficient to satisfy the amount of the reassessment.

Making an Advance Deposit

You can make an advance deposit using Form RC159, Amount Owing Remittance Voucher. To request additional remittance vouchers, see Online Request, Corporate Requests, and select Additional Remittance Vouchers.

To assist us in processing your payment, clearly indicate that it is an advance deposit and include both your 15-character account number and the tax year-end for which the advance deposit is intended. If you are making an advance deposit for multiple tax years, include a list of the individual tax years for which you are expecting a reassessment and the amount to be held for each year. If the necessary information (for example, account number, tax year-end) is not included, the advance deposit may be refunded.

If you expect more than one reassessment for the same tax year, state this when making your advance deposit. In this situation, if there is a credit remaining following a reassessment for the tax year in question, we will contact you to discuss the options available.

Managing Advance Deposits

Advance deposits are reviewed on a regular basis to make sure that there is a risk of reassessment for the period(s) in question and that the amount on deposit is reasonable. During this review process, we may contact you to confirm that the advance deposit is still needed. If the necessary information is not provided, and there are no balances owing or missing returns on any of your CRA accounts (for example, GST/HST, Other Levies), the advance deposit will be refunded.

Note: Bill C-9 has changed the calculation of the prescribed rate of interest paid by the CRA, resulting in a reduction of 2 percentage points for amounts payable to corporations.

Once advance deposits have been assigned to a specific tax year, there are guidelines limiting the transfer of these amounts. You may transfer an advance deposit:

• to pay an existing balance;
• as an instalment payment for an unassessed tax year on your corporation account;
• as an instalment payment for an unassessed period on your GST/HST account; or
• as a remittance on your Payroll account.

Additional information on making and managing advance deposits is available under Questions and Answers or by contacting our Business Enquiries line at 1-800-959-5525.