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.
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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