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.

1000

Related content

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

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal