In particular, businesses that have purchased insurance coverage from insurers outside Canada in 2023, or had insurance coverage from a global insurance policy that was acquired by an affiliated company in 2023 from insurers outside Canada, may be required to self-assess and remit this 10% federal tax. Businesses may also face provincial sales tax (PST) liabilities and insurance premium taxes owing if they have insurance coverage purchased from insurers that are not registered or licensed in certain provinces where they operate. Businesses should also be aware that insurance coverage purchased from insurers over electronic distribution platforms may be subject to these taxes.
Many types of insurance coverage may be subject to the 10% federal tax, PST and provincial insurance premium taxes, including cyber insurance and property insurance. Businesses subject to these cross-border insurance tax rules should review their coverage and determine whether they qualify for any federal or provincial exemptions. Businesses should ensure they comply with all related federal and provincial tax rules, including tax filing obligations and deadlines.
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