Ontario special additional tax on life insurance corporations

A life insurance corporation carrying on business in Ontario at any time in the tax year is subject to the Ontario special additional tax on life insurance corporations.

The special additional tax payable for a tax year is equal to the amount by which:

  • 1.25% of the corporation's taxable paid-up capital multiplied by the number of days in the tax year divided by 365

exceeds

  • the total of the corporation's Ontario corporate income tax and corporate minimum tax payable for the year.

Use Schedule 512, Ontario Special Additional Tax on Life Insurance Corporations (SAT), to calculate the tax payable.

The special additional tax paid for a tax year is added to the corporation's corporate minimum tax credit carryforward. This credit may be deducted to reduce Ontario corporate income tax payable in future years. Enter the special additional tax payable for the tax year in Part 4 of Schedule 510, Ontario Corporate Minimum Tax.

Related corporations

Life insurance corporations that are subject to the special additional tax and related, at the end of the tax year, to another life insurance corporation carrying on business in Canada must complete Schedule 513, Agreement Among Related Life Insurance Corporations (Ontario), to allocate the capital allowance among the members of the related group.

Reporting the tax

File Schedule 512 and, if applicable, Schedule 513 with your T2 return.

For more information, see the schedules and section 63 of the Taxation Act, 2007 (Ontario).

On line 280 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the special additional tax on life insurance corporations payable.

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