Yukon increased its insurance premium tax to 4% effective January 1, 2021
Insurance companies now face higher insurance premium tax on insurance premiums related to Yukon. Yukon's 2020 budget increased its insurance premium tax to 4% (from 2% and an additional 1% tax rate for property and fire coverage) effective January 1, 2021. This new single 4% insurance premium tax rate applies to all insurance premiums, with no additional rate for property and fire coverage.
In light of this change, insurance companies should review other provincial insurance premium tax rules to ensure that they meet all their tax obligations.
While the insurer usually pays insurance premium tax, some provinces and territories (including Yukon) make the tax payable by the insured or policyholder where the coverage is obtained from an insurer who is not licensed in the particular province or territory. As such, Yukon residents and businesses with coverage from foreign unlicensed insurers may also be affected by this rate change.
The PST and insurance premium tax rates, rules and remittance deadlines vary by province. In Yukon, the insurance premium tax return and remittance are due by March 15 each year.
For more information, contact your KPMG advisor.
Information is current to January 12, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
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