GST Treatment of Products and Services of Life and Health Insurance Companies

GST/HST Technical Information Bulletin B-052
April 12, 1991

This publication is not a legal document. It contains general information and is provided for convenience and guidance in applying the Excise Tax Act and Regulations. If interpretation problems occur, please refer to the legislation or contact the nearest Revenue Canada Excise office.

INTRODUCTION

This bulletin provides an overview of the GST status of certain products and services supplied by life and health insurance companies. It is divided into five parts.

The products and services in each Part are briefly described and categorized in the following order:

Exempt Products and Services
Taxable Products and Services (at a rate of seven per cent)
Zero-rated Products and Services
GST Not Applicable to Products and Services

Note: A number has been assigned to each product solely for ease of reference. For the purposes of this bulletin, the classification of GST status is based on the description of the products and services, and the assumption that a separate fee is charged for each listed product or service.

The Excise Tax Act contains several definitions that are relevant to the products and services supplied by life and health insurance companies. These definitions are listed here with reference to the section in which they are found.

Financial Service - subsection 123(1) ETA
Financial Instrument - subsection 123(1) ETA
Insurer - subsection 123(1) ETA
Insurance Policy - subsection 123(1) ETA
Segregated Fund of an Insurer - Section 131 ETA

Financial Services Regulations to the Excise Tax Act

Part 1 - INSURANCE PRODUCTS AND SERVICES (GENERAL)

Exempt Products and Services

Taxable Products and Services Zero-rated Products and Services GST Not Applicable to Products or Services

Part 2- INVESTMENT PRODUCTS AND SERVICES

Exempt Products and Services

Taxable Products and Services Zero-rated Products and Services GST Not Applicable to Products and Services Part 3 - REAL ESTATE

Exempt Products and Services

Taxable Products and Services Part 4 - ADMINISTRATION AND STAFF PRODUCTS AND SERVICES Exempt Products and Services Taxable Products and Services Part 5 - GROUP PENSION PRODUCTS AND SERVICES

The next group of products and services relate to contributions to and the administration of a group annuity contract which qualifies as an insurance policy and a financial instrument as defined in the Excise Tax Act. The charges for administration may be grouped into an all-inclusive amount or may be individually calculated and charged to the plan sponsor and/or certificate holders.

Exempt Products and Services

The next group of products and services pertain to the administration of a group annuity contract where the provider of the service is not a party (at risk) to the group annuity contract.

Taxable Products and Services

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