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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 129778-2
February 14, 2012
Dear [Client]:
Subject:
EXCISE INTERPRETATION
Clarification of 10% Part I Tax on Insurance Premiums [Other than Marine]
We trust our recent reply to your letter of [mm/dd/yyyy] concerning the application of Part I of the Excise Tax Act (ETA) to the operations of [...][Company A] was helpful. In concluding that letter, we informed you that responses to the questions regarding authorized insurers required further development and would be provided in a subsequent letter.
At this time we would like to address these remaining two questions.
Question 19 - How do auditors determine an insurer's licensed status for a particular year?
Should a match not be found on the current listing of the Office of the Superintendent of Financial Institutions Canada (OSFI) or provincial regulators lists of authorized insurers and evidence points to the insurer being an authorized Canadian insurer, the appropriate regulatory body would be contacted to request lists from previous years to determine if the insurer was authorized at the time the insurance contract was placed.
Question 20 - If an insurer is licensed in Canada, does the CRA have any concerns about whether or not any of the underwriting has occurred outside of Canada? For example, for some classes of risks, some insurers may draw on specialized expertise for personnel who reside elsewhere. More specifically, does the "insure in Canada" concept under Part XIII of the Insurance Companies Act (ICA) have any relevance to the determination of whether an insurer is authorized?
The CRA is generally satisfied that insurance premiums are exempt from the tax imposed pursuant to paragraph 4(1)(a) of the ETA when the insurer is licensed and authorized by OSFI or a provincial regulator to transact the business of that class of insurance in Canada. For information regarding Part XIII of the ICA, the office of the OFSI may be contacted and information is available at www.osfi-bsif.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 call me directly at (613) 957-8154.
Yours truly,
Duncan Jones
Manager, Softwood Lumber and Other Taxes
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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