Canada: Insurance premium tax increased to 4% (Yukon)

Canada: Insurance premium tax increased to 4% (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 1 January 2021.


Insurance companies now face a higher insurance premium tax on insurance premiums related to Yukon. The new single 4% insurance premium tax rate applies to all insurance premiums, with no additional rate for property and fire coverage.

KPMG observation

Insurance companies may need to review other provincial insurance premium tax rules to determine 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 when 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 be affected by this rate change.

The provincial sales tax and insurance premium tax rates, rules, and remittance deadlines vary by province. In Yukon, the insurance premium tax return and remittance are due by 15 March each year.

Read a January 2021 report prepared by the KPMG member firm in Canada

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