The Insurance Corporations Tax Act

The Insurance Corporations Tax Act, C.C.S.M. c. I50 (Assented to November 10, 2017) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows: bilingual version (HTML) Table of Contents Section INTRODUCTORY PROVISIONS 1 Definitions 2 Administration and enforcement 3 Tax payable to the government IMPOSITION OF TAX 4 Tax payable by insurer 5 Tax payable by special broker 6 Tax payable by insurance purchaser 7 Exemptions from tax 8 Due date for tax payable 9 Information returns TRANSITIONAL PROVISIONS, AMENDMENTS AND REPEALS 10 Transitional provisions 11 C.C.S.M. F80 amended 12 C.C.S.M. I40 amended 13 C.C.S.M. T2 amended 14 Repeals C.C.S.M. REFERENCE AND COMING INTO FORCE 15 C.C.S.M. reference 16 Coming into force INTRODUCTORY PROVISIONS Definitions 1(1) The following definitions apply in this Act. "director" means (a) the Deputy Minister of Finance; or (b) an Assistant Deputy Minister of Finance. (« directeur ») "dividend" includes any amount that is payable or to be credited by an insurer to its insured and is composed in whole or in part of a portion of the amount previously paid by the insured as a premium. (« participation ») "insurer" means a person who undertakes to provide insurance under a contract of insurance. It includes (a) an attorney authorized to act for, or acting for, a reciprocal or inter-insurance exchange; (b) an underwriter or syndicate of underwriters operating on the plan known as "Lloyd's"; and (c) the United Health Services Corporation; but does not include a fraternal society, friendly society or employees' mutual benefit society. (« assureur ») "Manitoba premium" means (a) in the case of life insurance, (i) the premium for insurance on the life of a person who is resident in Manitoba when the premium is due, and (ii) if it is a group contract, the portion of the premium that relates to insurance on the lives of persons who are resident in Manitoba when the premium is due; (b) in the case of any other insurance, whether it is an individual or group contract, the whole or any portion of the premium that relates to insurance for or in respect of (i) one or more persons who are resident in Manitoba when the premium is due, or (ii) property that is situated in Manitoba. It does not include a premium under a contract of reinsurance. (« prime manitobaine ») "minister" means the Minister of Finance for Manitoba. (« ministre ») "net Manitoba premiums" for a taxation year in relation to any type or class of insurance means the total of the insurer's Manitoba premiums for that type or class minus the following amounts: (a) the cash value of any dividend paid or credited for that taxation year in respect of contracts of insurance on which Manitoba premiums were paid for that type or class of insurance; (b) the value of any Manitoba premiums paid for that type or class of insurance that were returned in that year to policyholders or their personal representatives or beneficiaries. (« primes manitobaines nettes ») "premium" means (a) a single or periodic payment made as consideration under a contract of insurance; and (b) an amount collected under a reciprocal contract of indemnity or inter-insurance. (« prime ») "special broker" means a person who procures or arranges for another person, or assists another person to obtain, insurance from an unlicensed insurer. (« courtier spécial ») "taxation year" means a calendar year. (« année d'imposition ») "unlicensed insurer" means an insurer who is not licensed under The Insurance Act to carry on an insurance business in Manitoba. (« assureur non titulaire d'une licence ») Terms used in The Insurance Act 1(2) In this Act, (a) "class" , "contract" , "employees' mutual benefit society" , "fraternal society" , "friendly society" , "insurance" , "premium note" and "reciprocal or inter-insurance exchange" have the same meaning as in section 1 of The Insurance Act ; and (b) a reference to "accident and sickness insurance" , "aircraft insurance" , "automobile insurance" , "hail insurance" or "life insurance" is a reference to the corresponding class of insurance prescribed by regulation under The Insurance Act . S.M. 2018, c. 34, s. 19 ; S.M. 2020, c. 21, s. 40 . Administration and enforcement 2 Part I of The Tax Administration and Miscellaneous Taxes Act applies to the administration and enforcement of this Act. Tax payable to the government 3 Every tax imposed by this Act is payable to the government. IMPOSITION OF TAX Tax payable by insurer 4(1) For each taxation year after 2017, an insurer must pay a tax equal to the total of (a) 2% of the insurer's net Manitoba premiums for that year under (i) contracts of life insurance, and (ii) contracts of accident and sickness insurance; (b) 3% of the insurer's net Manitoba premiums for that year under other contracts of insurance. Additional tax on property insurance 4(2) For each taxation year after 2020, an insurer must pay a tax equal to 1% of the net Manitoba premiums payable to the insurer in respect of contracts of property insurance other than (a) aircraft insurance, automobile insurance and hail insurance; and (b) insurance against loss or damage to an automobile caused by fire, if that insurance is not incidental to automobile insurance. This tax is in addition to the tax payable under subsection (1). 4(3) [Repealed] S.M. 2020, c. 21, s. 162 . S.M. 2020, c. 21, s. 162 ; S.M. 2021, c. 61, s. 17 . Tax payable by special broker 5 If a contract of insurance with an unlicensed insurer (other than Manitoba Public Insurance Corporation or United Health Services Corporation) is procured or arranged by or obtained with the assistance of a special broker, or continued or renewed through a special broker, section 4 applies not to the insurer but to the special broker as if (a) the special broker were a licensed insurer; and (b) the premiums payable for that insurance were payable to the broker and included in the broker's net Manitoba premiums. Tax payable by insurance purchaser 6(1) A person who enters into a contract of insurance with an unlicensed insurer, other than a contract to which section 5 applies, must pay a tax equal to the premium payable under or in respect of that contract multiplied by the percentage that applies under section 4 to an insurer's net Manitoba premiums for that type or class of insurance. Refund of tax if premium refunded 6(2) If any part of a premium in respect of which tax was paid under this section is refunded, the minister may refund the tax paid in respect of the refunded amount. Exemptions from tax 7 Despite sections 4 to 6, no tax is payable under this Act on the following: (a) amounts received or receivable by an insurer, or paid or payable by any person, as consideration for a contract (commonly referred to as an "annuity contract") that provides for the payment of an income for a specified period or for life and under the terms of which the sole benefit stated to be payable by reason of death does not exceed the total of the amounts paid as consideration for the contract together with interest; (b) premiums paid or payable under a premium note to a mutual insurance company in respect of fire insurance or hail insurance; (c) premiums paid or payable under a contract of marine insurance as defined in The Marine Insurance Act . Due date for tax payable by insurer or broker 8(1) The tax payable by an insurer or special broker for a taxation year must be paid to the minister on or before March 20 of the following year. Due date for tax payable by insurance purchaser 8(2) The tax payable under section 6 in respect of a premium must be paid to the minister on or before the 20th day of the month following the month in which the premium became payable. Method of payment 8(3) The tax payable by an insurer or special broker must be paid in accordance with section 4.2 of The Tax Administration and Miscellaneous Taxes Act . S.M. 2018, c. 34, s. 20 ; S.M. 2020, c. 21, s. 41 . Information return by insurer or broker 9(1) On or before March 20 of each year, an insurer or special broker who is required to pay tax for the immediately preceding taxation year must complete and file with the director an information return in accordance with section 4.2 of The Tax Administration and Miscellaneous Taxes Act . Information return by insurance purchaser 9(2) A person who is required to pay the tax under section 6 in respect of a contract of insurance must file a report with the director, in a manner approved by the director, on or before the 20th day of the month following the month in which the contract was entered into. S.M. 2018, c. 34, s. 21 ; S.M. 2020, c. 21, s. 42 . TRANSITIONAL PROVISIONS, AMENDMENTS AND REPEALS Transitional 10(1) In this section, "former Act" means (a) The Insurance Corporations Tax Act , R.S.M. 1987, c. I50; (b) section 31 of The Fires Prevention and Emergency Response Act ; and (c) the Property Insurance Assessment Regulation , Manitoba Regulation 174/2008; as they read immediately before being repealed by this Act. 10(2) Despite the provisions of the former Act, Part 1 of The Tax Administration and Miscellaneous Taxes Act applies to the administration of the former Act as if it were a tax Act as defined in The Tax Administration and Miscellaneous Taxes Act . 10(3) Despite the repeal of the former Act but subject to subsection (2), the former Act continues to apply in respect of any tax imposed by the former Act in respect of a taxation year before 2018. 10(4) The Lieutenant Governor in Council may make regulations respecting (a) the administration the former Act in accordance with Part 1 of The Tax Administration and Miscellaneous Taxes Act ; (b) the transition from the former Act to this Act and any transitional or other problem arising from the repeal of the former Act before all taxes imposed by that Act have been paid. 11 to 13 NOTE: These sections contained amendments to other Acts, which amendments are now included in those Acts. Repeal 14 The following are repealed: (a) The Insurance Corporations Tax Act , R.S.M. 1987, c. I50; (b) the Insurance Corporations Tax Regulation , Manitoba Regulation 391/87 R; (c) the Property Insurance Assessment Regulation , Manitoba Regulation 174/2008. C.C.S.M. REFERENCE AND COMING INTO FORCE C.C.S.M. reference 15 This Act may be referred to as chapter I50 of the Continuing Consolidation of the Statutes of Manitoba . Coming into force 16 This Act comes into force on January 1, 2018.