Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower “A”, 20th floor
320 Queen Street
Ottawa, ON K1A 0L5
[Addressee]
Case Number: 175386
Business Number: […]
Dear [Client],
Subject: EXCISE TAX INTERPRETATION
Part I of the Excise Tax Act: Request for exemption for […][XYZ] [on insurance premiums]
Thank you for your letter of [mm/dd/yyyy], regarding the application of the 10% excise tax on insurance premiums to […]([…][XYZ]). It is your view that [XYZ] is exempt from paying this tax because it is an “Indian Band” under the Indian Act. […]
All legislative references are to Part I of the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.
INTERPRETATION REQUESTED
You would like to know:
(i) whether […][XYZ is exempt from] paying the 10% excise tax on insurance premiums for […][an insurance policy];
(ii) the time period for the exemption; […]
STATEMENT OF FACTS
[…][The excise tax generally applies to certain classes of] insurance […] at a rate of 10% on the net premiums paid or payable […] during the immediately preceding calendar year [in respect of an insurance contract]. This tax is in addition to any other tax payable under any other law, and is payable each year on or before April 30.
[…][XYZ`s insurance] policy is […] not underwritten by authorized Canadian insurers or authorized provincial/territorial insurers. It is underwritten by […], a non-authorized insurer.
I understand that this policy was not reported by a broker on Form B241 [Excise Tax Return – Broker]. [XYZ] self-assessed for this 10% tax, in [mm/yyyy] […][and] submitted Form E638 [Application for Exemption From Premium Taxes Imposed Under the Excise Tax Act - Part I] and five declinations from [authorized] Canadian insurers to the Summerside Tax Centre (STC). I understand that you have been in contact with the STC.
ADMINISTRATIVE MATERIALS
ETSL Memorandum 7.1 [X7.1 - Special Levies – Insurance Premiums] elaborates on the application of this 10% excise tax. I would recommend that you use it as reference material, rather than RC4634 [Notice to Brokers, Agents, Insured and Insurers / Excise Tax Act - Part I].
INTERPRETATION GIVEN
(i) The 10% excise tax imposed on insurance premiums does not apply to [XYZ], based on the facts outlined in your letter […][because] [XYZ] was unable to obtain the above-noted insurance from an authorized Canadian or provincial/territorial insurer.
(ii) The term of this policy is from [mm/dd/yyyy] to [mm/dd/yyyy]. [XYZ] can file one Form E638 for the duration of the insurance policy. As noted above, [XYZ] submitted this form to the STC, in [mm/yyyy]. As this exemption covers the duration of the policy, [XYZ] does not have to repeat this filing process annually. […]
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
Should you have any questions with respect to this letter, please call me at (613) 954-4208 or Michael Moskovic at (613) 957-9877. Should you have any excise tax processing-related questions, please call the Summerside Tax Centre toll free at (877) 432-5472.
Yours truly,
Dennis Dekleva
Manager, Excise Taxes and Other Levies
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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