From the Ryan TaxDirectTM Line…
Our Client Support Services Team typically receives over 5,000 calls from clients each year on the Ryan TaxDirectTM line.
Here’s a question that we’ve recently received from several clients:
Ontario Sales Tax on Insurance Premiums
Question: We recently received a 2018 renewal notice for an insurance contract related to property in Ontario. The notice indicates that the insurance premium is subject to Ontario tax at 8%. Can we claim this amount as an HST input tax credit?
Answer: Unfortunately, no. Ontario levies a retail sales tax on insurance premiums related to risks situated in the province. However, this tax is a provincial sales tax, not HST, and it is not recoverable as an input tax credit. This tax should be treated as an expense in your organization’s accounts.
Note that Québec, Manitoba, Newfoundland and Labrador, and Saskatchewan (as of August 1, 2017) also levy unrecoverable sales tax on insurance premiums related to risks situated in their respective provinces, subject to various exemptions.
Have a different question? Call the Ryan TaxDirectTM line at 1.800.667.1600 or visit: Ryan Canada TaxDirect