Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether CRA’s administrative policy, as described in
paragraph 27 of IT-470R, applies to commissions income earned by an insurance salesperson on
his/her own property/liability insurance policies on his/her personal home and/or automobile?
Position: No.
Reasons: This CRA’s administrative policy does not apply to
commissions received on insurance policies acquired for personal use other than life insurance,
such as home or automobile insurance.
XXXXXXXXXX
2010-037491
I. Landry, M. Fisc.
March 27, 2012
Dear XXXXXXXXXX :
Re: Commission Income on Personal Insurance Policies
We are writing in response to your letter of July 5, 2010, concerning the taxation of
commissions income earned by an insurance salesperson on his/her own property/liability
insurance policies on his/her personal home and/or automobile.
Generally, commissions received by a salesperson are taxable, either under section 5 or
section 9 of the Income Tax Act (the “Act”), depending on whether the particular salesperson
is an employee or self-employed.
Interpretation Bulletin IT-470R, Employees' Fringe Benefits Consolidated, outlines the
administrative position of the Canada Revenue Agency (“CRA”) concerning non-taxable
commissions received on personal sales. In particular, paragraph 27 of IT-470R, states, in
part:
“...where a life insurance salesperson acquires a life insurance policy, a commission
received by that salesperson on that policy is not taxable provided the salesperson owns
that policy and is obligated to make the required premium payments thereon.”
However, this administrative policy does not apply to commissions received on personal
insurance policies other than life insurance policies, such as home or automobile insurance
policies.
We trust these comments will be of assistance.
Yours truly,
Michel Lambert, CA, M. Fisc.
for Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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