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 Duties and Taxes Division
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 181304
Dear [Client]:
Subject: EXCISE INTERPRETATION
[Application of Part I (Insurance Premiums Other Than Marine) of the Excise Tax Act]
Thank you for your letter of [mm/dd/yyyy], concerning the application of Part l, Insurance Premiums Other Than Marine, of the Excise Tax Act (ETA).
All legislative references are to the ETA and the regulations therein, unless otherwise specified.
[…][STATEMENT OF FACTS]
[…]([…][ABC]), acts as broker for an insurance contract between a number of insurers and a worldwide operating cooperation.
[ABC], is not authorized in Canada.
As the contract covers risks in Canada, the insured files and pays excise taxes for the part of the premium related to risks in Canada.
Recently one of the co-insurers informed [ABC] that as a broker [ABC] […][is] required to report to the Canada Revenue Agency (CRA) using form B241, Excise Tax Return – Broker. [ABC] […][is] not sure now how to handle this matter as some of the involved insurers are authorized in Canada, but others are not.
INTERPRETATION REQUESTED
You would like an explanation of who in this case is responsible to report to the CRA on form B241?
INTERPRETATION GIVEN
[ABC], acting as a broker in placing a contract of insurance for risks ordinarily within Canada with a number of insurers of which one or more insurers is not authorized in Canada, is required to file a return, using form B241, Excise Tax Return – Broker.
Excise Taxes and Special Levies Memoranda, X7.1 Special Levies-Insurance Premiums, explains in section 23 that subsection 5(2) of the ETA requires;
Every person who, acting as a broker or agent, obtains, effects or places, or assists in obtaining, effecting or placing any contract of insurance entered into or renewed with
i. any insurer not incorporated under the laws of Canada or of any province or not formed in Canada, or
ii. any exchange having its chief place of business outside Canada or having a principal attorney-in-fact whose chief place of business is outside Canada,
that at the time the contract is entered into or renewed is not authorized under the laws of Canada or of any province to transact the business of insurance, and on which the net premiums are taxable, is required to file a return, using form B241, Excise Tax Return – Broker.
The memoranda also explains in section 25, that the return is due on or before March 15 for each year in which a contract of insurance is entered into or renewed during the immediately preceding calendar year.
The memorandum X7.1 Special Levies-Insurance Premiums, can be found under publications, on the CRA web site at www.cra-arc.gc.ca .
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Goods and Services Tax Rulings, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the Part I tax on insurance premiums other than marine, regulations or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please write;
Excise Taxes and Other Levies Unit
Place de Ville
Ottawa, Ontario, Canada, K1A0L5
Yours truly,
Michael Ryder
Rulings Officer
Excise Taxes Other Levies
Excise and GST/HST Rulings Directorate
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