Several revisions have been made to Manitoba Information Bulletin No. 061, “Insurance”. The implementation date of the 7% Manitoba Retail Sales Tax (“RST”) on certain insurance products has been extended, and will now be effective starting July 15, 2012. Previously, the effective date was to be July 1, 2012.
The revised bulletin clarifies the tax status of certain types of insurance, indicating that flood insurance, sewer backup insurance and pet insurance are taxable insurance contracts.
The transition rules for the implementation of RST on taxable insurance contracts have been revised. RST will apply on all new or renewable contracts with a definite term (excluding group contracts) that come into effect after July 14, 2012. For group insurance contracts and taxable insurance contracts with an indefinite term, all premiums that are payable and that relate entirely to a coverage period after July 14, 2012 are subject to RST.
The previous version of the bulletin indicated that group disability insurance would be a non-taxable insurance contract. However, the revised bulletin indicates that taxable group insurance contracts include contracts covering group life, optional and dependent life, creditor insurance, accidental death and dismemberment, disability and critical illness insurance, but do not include group contracts covering the health care of insured individuals.
The revised bulletin further clarifies that for insurance contracts obtained by certain types of purchasers, such as farmers and custom farming service providers, commercial fishers, or status Indians or Indian Bands that may qualify for an exemption from RST, a signed statement supporting the exemption must be obtained by the vendor for any contracts entered into or renewed after July 14, 2012.
See our tax development last month under “Manitoba Information Bulletin No. 061” for more information on how tax will apply to insurance contracts in the province.
MB Bulletin No. 061 revised