Insurance Premiums Tax Act

Link to law: http://nslegislature.ca/legc/statutes/insurepr.htm
Published: 2016-01-05

Insurance Premiums Tax Act

CHAPTER 232 OF THE REVISED STATUTES, 1989

amended 1998, c. 8, ss. 50, 51; 2008, c. 2, ss. 24-26size>

An Act to Impose a Tax on the IncomeDerived from Insurance Premiums

Short title
1 This Act may be cited as the Insurance Premiums Tax Act. R.S., c. 232, s. 1.

Interpretation

2 In this Act,
(a) "insurance company" means a person or corporation carrying on in the Province the business of insurance, as defined in the Insurance Act, and includes a reciprocal or inter-insurance exchange and underwriters and syndicates of underwriters operating on the plan known as "Lloyds", but does not include

(i) a fraternal society as defined in the Insurance Act, or (ii) a mutual insurance corporation in respect of any taxation year in which the net premium income in the Province of the corporation is wholly derived from the insurance of churches, schools or other religious, educational or charitable institutions;

(b) "marine insurance" has the same meaning as it has in the Insurance Act; (c) "Minister" means the Minister of Consumer Affairs;
(d) "taxation year" means a fiscal year in which premiums are receivable in respect of business transacted in the Province. R.S., c. 232, s. 2; 1998, c. 8, s. 50; 2008, c. 2, s. 24.

Tax on insurance premium and exception

3 (1) In order to the raising of a revenue for provincial purposes, every insurance company shall pay to the Minister a tax equal to three per cent of the gross premiums on life insurance, accident insurance and sickness insurance as defined in the Insurance Act and four per cent of gross premiums on other than life insurance, accident insurance and sickness insurance, receivable by the company during the taxation year in respect of business transacted by it in the Province other than premiums in respect of reinsurance ceded to the company by other companies and considerations for annuities after deducting from such gross premiums
(a) the cash value of dividends paid or credited by the company to policy holders; and
(b) premiums returned by the company.
(2) For the purpose of subsection (1), "business transacted in the Province" means
(a) in the case of insurance of property, all contracts on which premiums are receivable in respect of property that was situated in the Province at the time the premiums became payable;
(b) in the case of all other insurance, all contracts on which premiums are receivable in respect of persons who were resident in the Province at the time the premiums became payable.
(3) This Section does not apply to premiums receivable in respect of contracts of marine insurance.
(4) This Section does not apply to mutual insurance companies designated pursuant to Section 15 with respect to premiums receivable on contracts of insurance on farm and fishing property written after December 31, 2007. R.S., c. 232, s. 3; 2008, c. 2, s. 25.

Quarterly tax payment

4 Every insurance company liable to tax under Section 3 shall, within sixty days after the end of each quarter in each taxation year, pay an amount equal to the actual amount of tax payable by it in respect of that quarter. R.S., c. 232, s. 4; 1998, c. 8, s. 51.

Interest on overdue payment and interest rate

5 (1) Where any tax or portion thereof payable under this Act is not paid in full on the date on which payment is due, the insurance company shall pay to the Minister the amount due together with interest on the sum of the tax or portion thereof unpaid at the rate per year determined in accordance with subsection (2) from the date on which the tax or portion thereof was due until payment is made.
(2) The rate for the purpose of subsection (1) is the sum of the Bank of Canada rate on the date on which the payment was due and four per cent. R.S., c. 232, s. 5.

Extension of time

6 The Minister may, before or after the time for making it, enlarge the time for making any return. R.S., c. 232, s. 6.

Inquiry

7 (1) Where the Minister, in order to enable him to determine whether or not a return furnished is correct, desires further information, he may, by registered letter addressed to the company or an agent of the company or, if the company has no agent within the Province, to any person, persons or corporation doing business with the company, require a further return to be furnished under oath within thirty days and he may designate a person to examine the books, papers, documents and records of any company required to furnish returns under this Act.
(2) If the required information is not furnished to the satisfaction of the Minister, the Governor in Council may direct inquiry to be made by a commissioner or commissioners appointed under the Public Inquiries Act, and the determination of the commissioner or commissioners shall, for the purposes of this Act, be final as to the particulars mentioned in the report, but the Governor in Council may for cause vary the report; but the findings of the commissioner or commissioners shall not be varied so that the amount of the tax payable by the company shall be increased without giving the company an opportunity of being heard.
(3) Where the inquiry is occasioned by failure to furnish the information required by the Minister, the company, unless the Governor in Council otherwise directs, shall pay the costs of the inquiry, but if the return is found to be correct and required information appears to have been duly furnished, the Minister may direct the costs or such of them as were necessary to be paid by the Province.
(4) Where the commissioner or commissioners find that the return understates the amount upon which the tax should be paid, the company, besides paying the costs of the inquiry, shall pay the tax based on the amount as found by the commissioner or commissioners, with fifty per cent added to the tax, unless the Governor in Council otherwise directs.
(5) The costs of the inquiry may be fixed and certified by the Minister or he may direct the same to be taxed, and when payable to the Minister the same may be recovered in the manner hereby provided for the recovery of a tax.
(6) Where the Minister directs the costs to be taxed, the same shall be taxed by a taxing officer of the Supreme Court.
(7) Where the commissioner or commissioners find that the return understates the amount on which the tax should be paid, but also certify that the understatement was not made with intent to decrease the amount of the tax to be paid but was made in good faith and with no improper motive, the Governor in Council may, upon the recommendation of the Minister, remit so much of the added percentage and so much of the costs as to him may seem meet. R.S., c. 232, s. 7.

Records and accounts

8 If any company fails or refuses to keep adequate books or accounts for the purposes of ascertaining the amount of the tax payable under this Act, the Minister may require such company to keep such records and accounts as he may prescribe. R.S., c. 232, s. 8.

Minister not bound

9 Any return or information supplied by or on behalf of any company shall not be binding upon the Minister and, notwithstanding such return or information or if no return has been made the Minister, may determine the amount of the tax to be paid by any company. R.S., c. 232, s. 9.

Recovery of tax by distress or court action

10 (1) In default of payment of any tax by this Act imposed, the same may be levied and collected with costs by distress upon the goods and chattels wherever found of the company liable therefor under a warrant signed by the Minister directed to the sheriff of any county, and the sheriff shall levy and collect the tax, or so much thereof as may be in arrears, and all costs, by sale of the goods and chattels of the company, or so much thereof as may be necessary to satisfy the tax and costs.
(2) Any tax or penalty imposed by this Act may, at the option of the Minister, be recovered with interest as aforesaid and costs in any court of competent jurisdiction by and in the name of the Minister, and the action shall be tried without a jury R.S., c. 232, s. 10.

Form of action and settlement of claim

11 (1) An action brought by the Minister under this Act shall be brought and prosecuted in and by his name of office, and may be continued by his successor in office, as if no change had occurred.
(2) The Minister may, either before or after the institution of proceedings against any company under this Act for enforcing payment of any tax or any pecuniary penalty, accept from the company the payment of a sum not less than the amount of the tax with interest or a sum not less than the minimum nor more than the maximum pecuniary penalty prescribed, as the case may be, and such payment shall be a full satisfaction, release and discharge of the tax or penalty. R.S., c. 232, s. 11.

Forgiveness or refund of tax

12 If any doubt or dispute arises as to the liability of a company to pay a tax or any portion of a tax demanded under the authority of this Act or if owing to special circumstances it is deemed inequitable to demand payment of the whole amount imposed under this Act, the Minister may accept such amount as he may deem proper and, if the tax demanded has been paid under protest, he may refund the same or any part thereof. R.S., c. 232, s. 12.

Inspection of return and duty of public servant

13 (1) No return made by any company under this Act shall be open to inspection by any person except the officers appointed under this Act, whose duty it is to inspect the same and any person appointed by the Governor in Council to inspect the same.
(2) No person employed in the public service of the Province shall communicate or allow to be communicated to any person not legally entitled thereto any information obtained under this Act or allow any person not legally entitled thereto to inspect or have access to any return made under this Act. R.S., c. 232, s. 13.

Penalty

14 Any company or person that fails to make a return required by or under this Act is liable to a penalty of ten dollars for every day during which the failure continues. R.S., c. 232, s. 14.

Regulations

15 (1) The Governor in Council may make regulations
(a) designating mutual insurance companies for the purpose of subsection 3(4);
(b) defining any word or expression used but not defined in this Act;
(c) deemed necessary or advisable by the Governor in Council to carry out effectively the intent and purpose of this Act.
(2) The exercise by the Governor in Council of the authority contained in subsection (1) is regulations within the meaning of the Regulations Act.
(3) A regulation made pursuant to subsection (1) may, where it so provides, be made retroactive in its operation to a date not earlier than January 1, 2008. 2008, c. 2, s. 26.
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