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.
| To: |
From: |
| Special Audits Division |
Financial Industries Division |
| E.H. Gauthier |
M.M. Trotier |
| Director |
957-8958 |
| |
7-2846 |
| SUBJECT: 24(1) |
Unless otherwise mentioned all references to statutes are to the income Tax Act, and references to regulations are to the Income Tax Regulations.
Taxation of Insurance Business
A Canadian resident life insurer which carries on an insurance business only in Canada is taxed in Canada on a worldwide basis. A Canadian resident multinational life insurer is taxed on its income from carrying on its insurance business in Canada only. The latter must determine the amount of its related Canadian investment income by attributing a proportion of its total investments to the insurance business carried on by it in Canada. This allocation is calculated using the ratio of the "Canadian reserve liabilities" ("CRL") to the "total reserve liabilities" ("TRL").
As an example, a Canadian resident life insurer may sell life insurance with respect to Canadian lives and also with respect to non-Canadian lives. Assume that the proportion of the life insurance written on Canadian lives is 75% and on U.S. lives is 25%. If the Canadian insurer does not have a permanent establishment in a country other than canada 100% of the investment and premium income is subject to tax in Canada.
24(1)
21(1)(b)
24(1)
21(1)(b)
We hope this information will be of assistance and apologize for any inconvenience our delay in responding may have caused. We are, of course, available to discuss this matter further should you wish to do so.
F. Lee WorkmanChiefFinancial Institutions SectionFinancial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1990
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1990
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