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, 20th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 125326
November 25, 2010
Dear [Client]:
Subject:
EXCISE TAX INTERPRETATION
Authorised insurer placements via non-resident intermediaries
Thank you for your letter of April 1, 2010 concerning the application of subsection 4(4) of the Excise Tax Act.
All legislative references are to the Excise Tax Act (ETA) and their regulations unless otherwise specified.
Interpretation Requested
You would like to know if the activities listed below, if undertaken by any one of your Canadian network offices on a global policy covering Canadian risks, would be sufficient to enable them to be viewed as the broker through whom insurance contracts are entered into or renewed for Excise Tax purposes.
• Collecting insured data;
• Developing program strategy/design;
• Advising on local legal, regulatory and insurance practices;
• Producing policy wordings;
• Presenting proposal/terms to the insured;
• Issuance of documents;
• Invoicing of local premium; and
• Local tax settlement.
Interpretation Given
Based on the information provided, none of the activities listed above could be used by itself to determine whether a contract of insurance would be deemed to have been entered or renewed through your Canadian network offices for Excise Tax purposes.
Subsection 4(4) of Part I of the ETA states that "where a contract of insurance is entered into or renewed through more than one broker or agent, or where payment of the premium or any part of the premium thereon is effected through more than one broker or agent, the contract shall, for the purposes of this Part, be deemed to have been entered into or renewed, as the case may be, through the broker or agent directly retained or instructed by the insured and not through any other broker or agent."
The determination of subsection 4(4) is based on the broker or agent retained or instructed by the insured rather than the activities performed by the broker or agent.
From the information provided, all of the activities mentioned could be performed by a broker or agent based on the instructions of another broker or agent and not necessarily the insured.
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, Excise and GST/HST Rulings and Interpretations Service, do not bind the CRA with respect to a particular situation. Future changes to the ETA, 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 613-957-4138. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Nathalie Robitaille
Excise Taxes and Other Levies Unit
Excise Duties and Taxes Division Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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