Decrease in premium tax delayed

The Quebec government has delayed, by five years, the decrease in the compensation tax on insurance premiums, thereby depriving plan sponsors of an expected reduction of 0.18 per cent in this tax, says a Morneau Shepell ‘News & Views.’ In December 2014, the Quebec government raised the compensation tax on insurance premiums and on amounts established in respect of an insurance fund from 0.3 per cent to 0.48 per cent. This increase was scheduled to end on April 1, 2017. Some insurers even incorporated the reduced tax in their rate renewal conditions for 2017. Quebec imposes the heaviest tax burden on group insurance plans in Canada. In addition to the 0.48 per cent compensation tax, the three per cent insurance premium tax and the nine per cent non-refundable sales tax, Quebec is the only province where the employer’s contribution to group medical and dental insurance plans is a taxable benefit for employees. (End of article)

Source: Benefits and Pension Monitor News