Canada: Tax on cross-border insurance coverage, due 30 April

Canada: Tax on cross-border insurance coverage

Certain businesses must pay a federal tax of 10% of net insurance premiums paid or payable if they have purchased insurance coverage outside Canada or were covered under a global insurance policy acquired by a parent company in 2015. The tax is due 30 April 2016.

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Generally, the federal tax applies when the business or individual purchases coverage for risks in Canada directly, or when the coverage is obtained on the business or individual’s behalf by a third party. This tax could also apply when a business has insurance coverage with an insurer licensed in Canada, but the broker or agent is outside Canada.

These businesses and individuals may also be required to self-assess provincial taxes and levies on cross-border insurance coverage or multi-provincial insurance coverage. These provincial taxes and levies have specific rules and deadlines that differ from the ones that apply for the 10% federal tax.

 

Read an April 2016 report [PDF 52 KB] prepared by the KPMG member firm in Canada: Cross-Border Insurance Coverage - Don't Miss April 30 Deadline for 10% Excise Tax 

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