The Insurance Premiums Tax Act

Transcription

1 The Insurance Premiums Tax Act being Chapter I-10 of The Revised Statutes of Saskatchewan, 1978 (effective February 26, 1979). NOTE: This consolidation is not official. Amendments have been incorporated for convenience of reference and the original statutes and regulations should be consulted for all purposes of interpretation and application of the law. In order to preserve the integrity of the original statutes and regulations, errors that may have appeared are reproduced in this consolidation.

2 Table of Contents SHORT TITLE 1 Short Title INTERPRETATION 2 Interpretation REGISTRATION 3 Registration TAXATION, RETURNS, ETC. 4 Tax on gross premiums 5 Return of income 6 Return by trustee, etc. 7 Statutory declaration 8 Extension of time 9 Payment with return 10 Records required and right to inspect ASSESSMENTS, APPEALS AND REFUNDS 11 Power to make assessment 12 Examination of returns and assessment thereof 13 Refund of overpayment 14 Power to reassess 15 Appeal to Board of Revenue Commissioners 16 Appeal from decision of board 17 Due date of tax not affected by appeal RECOVERY OF TAXES 18 Tax constitutes a lien 19 Filing of certificate 20 Demand on third party 21 Default in payment of taxes 22 Exercise of recovery powers OFFENCES AND PENALTIES 23 Failure to register under section 3 24 Failure to make returns under section 5 or 6 to remit tax 25 Non-compliance with section Contravention of Act an offence 27 False statements 28 Liability or corporation officers 29 Notices in writing 30 Onus of proof 31 Limitation of prosecution GENERAL 32 Interchange of information 33 Delegation 34 Regulations 35 The Crown bound

3 CHAPTER I-10 An Act to impose a Tax on the Income derived from Insurance Premiums SHORT TITLE Short Title 1 This Act may be cited as The Insurance Premiums Tax Act. Interpretation 2 In this Act: INTERPRETATION annuity contract (a) annuity contract means a contract that provides for the payment of an income for a specified period or for life and under the terms of which the sole benefit stated to be pay able by reason of death does not exceed the sum of the amounts paid as consideration for the contract together with interest; company (b) company means insurance company; dividend (c) dividend, without restricting the ordinary meaning thereof, includes an amount payable, or subject to be credited, by an insurer to its insured and that is composed in whole or in part of a portion of the amount previously paid by the insured as a premium or as a deposit or payment under a reciprocal contract of indemnity or inter-insurance; exchange (d) exchange means a group of persons formed for the pur pose of exchanging reciprocal contracts of indemnity or inter-insurance with each other through the same attorney; fraternal society (e) fraternal society means a company, society, order or voluntary association incorporated or formed and carried on for the benefit of its members and their beneficiaries and not for profit, which makes provision by its constitution and laws for payment to beneficiaries of benefits on the death or dis ability of its members; insurance (f) insurance means insurance as defined in The Saskatchewan Insurance Act;

4 4 c. I-10 INSURANCE PREMIUMS TAX insurance company (g) insurance company means a person or corporation who or which carries on or, under The Saskatchewan Insurance Act, is deemed to carry on an insurance business in the province, and includes The Saskatchewan Government Insurance Office mentioned in section 4 of The Saskatchewan Government Insurance Act, an attorney authorized to act for, or acting for, a reciprocal or inter-insurance exchange and underwriters or syndicates of underwriters operating on the plan known as Lloyds but does not include: (i) the Saskatchewan Crop Insurance Board constituted under The Saskatchewan Crop Insurance Act; (ii) a fraternal society; (iii) a mutual benefit society; (iv) a non-profit health service association or an association incorporated pursuant to the provisions of The Mutual Medical and Hospital Benefit Associations Act, or a non-profit association or corporation incorporated under The Com panies Act to provide health services; (v) a pension fund and employees mutual benefit societies incorporated under or subject to The Companies Act; marine insurance (h) marine insurance means insurance against marine losses, that is to say, the losses incident to marine adven ture, and includes such insurance that, by the express terms of a contract or by usage of trade, extends so as to protect the insured against losses on any land or air or inland water risk that is incidental to a sea voyage but does not include inland marine insurance that is not incidental to a sea voyage; minister (i) minister means the Minister of Finance; mutual benefit society (j) mutual benefit society means a mutual company formed for the purpose of providing sick and funeral benefits for its members or for this and any other purposes necessary or incidental thereto except life insurance; premium (k) premium means the single or periodic payment made as consideration under a contract of insurance and includes the amount collected from a subscriber under a reciprocal contract of indemnity or inter-insurance for the purpose of defraying losses incurred by the subscribers to a reciprocal or inter-insurance exchange and the necessary operation expenses of the exchange, but does not include any tax, assessment or other amount payable under or pursuant to The Saskatchewan Hospitalization Act, The Workers Compensation Act or The Health Services Act; superintendent (l) superintendent means the Superintendent of Insurance. R.S.S. 1965, c.63, s.2; 1968, c.36, s.1; , c.49, s.2; R.S.S. 1978, c.i-10, s.2.

5 INSURANCE PREMIUMS TAX c. I-10 5 REGISTRATION Registration 3 Every insurance company that is engaged in the business of insurance in the province at the commencement of this Act, or has been so engaged in a period covered by this Act, or that thereafter is so engaged, shall forthwith notify the superintendent of the fact that it is or has been engaged in such operations, and upon disconti nuance of those operations shall notify the superintendent of the discontinuance. R.S.S. 1965, c.63, s.3; , c.49, s.3; R.S.S. 1978, c.i-10, s.3. TAXATION, RETURNS, ETC. Tax on gross premiums 4(1) Every insurance company shall pay to the minister a tax in respect of life insurance premiums of two per cent calculated on the gross premiums receivable by the company or its agent or agents during each year, from or in respect of, persons insured, each of whom is resident in Saskatchewan at the time the respective premium becomes payable, other than premiums in respect of rein surance ceded to the company by other insurance companies and premiums in respect of annuity contracts, after deducting from such gross premiums: (a) the cash value of dividends paid or credited to policy holders; (b) premiums returned. (2) Every insurance company shall pay to the minister a tax, in respect of premiums other than life insurance premiums, of two per cent calculated on the gross premiums receivable by the company or its agent or agents during each year, in respect of business trans acted in Saskatchewan, other than premiums in respect of rein surance ceded to the company by other insurance companies and premiums receivable under contracts of marine insurance, after deducting from such gross premiums: (a) the cash value of dividends paid or credited to policy holders; (b) premiums returned. (3) In determining the amount of the tax payable under subsec tion (2) every premium that, by the terms of the policy or renewal thereof, becomes payable in respect of insurance of a person resi dent or property situated in Saskatchewan at the time the premium becomes payable whether or not: (a) the premium is earned wholly or partly in Saskatchewan; (b) the business in respect of the policy is transacted wholly or partly in Saskatchewan; or (c) the payment of the premium is made wholly or partly in Saskatchewan; shall be deemed to be a premium payable in respect of business transacted in Saskatchewan.

6 6 c. I-10 INSURANCE PREMIUMS TAX (4) Where it is established to the satisfaction of the Lieutenant Governor in Council that a country or any state of a country discriminates unfairly by imposing taxes, fees and other monetary obligations on an insurance company or a particular class of insurance companies organized under the laws of Canada or of Saskatchewan and having their principal offices in Saskatchewan that in the aggregate are in excess of comparable taxes, fees and monetary obligations imposed on a similar company or class of companies incorporated under the laws of that country or state, the Lieutenant Governor in Council may direct that any company or any class of companies incorporated under the laws of that country or state and that transacts business in Saskatchewan, shall pay, in addition to the tax otherwise imposed under this section a tax not exceeding the equivalent of that excess, and the additional tax shall be recoverable in the same manner as any other tax imposed under this Act. R.S.S. 1965, c.63, s.4; 1966, c.10, s.1; R.S.S. 1978, c.i-10, s.4. Return of income 5(1) Every insurance company shall, on or before the fifteenth day of March in each year, without any notice or demand, make a return to the minister, in such form as the superintendent may from time to time determine, showing the premiums subject to tax for the preceding year, together with such other information as the superintendent may deem necessary. (2) Where the superintendent has knowledge or suspects that an insurance company whose premium income is liable to assessment is about to cease transacting business in the province, the superin tendent may by notice require that insurance company forthwith to make a return of income up to that time pursuant to this Act. (3) If the superintendent for any purpose of this Act desires any information or return from an insurance company that has not made a return under this Act, or desires any additional information or a further return from an insurance company that has made a return, the superintendent may demand from that company the information or return desired, and that company shall furnish or deliver to the superintendent the information or return within the time specified in the demand. R.S.S. 1965, c.63, s.5; , c.49, s.3; R.S.S. 1978, c.i-10, s.5. Return by trustee, etc. 6 Every trustee in bankruptcy, assignee, liquidator, receiver, administrator and other person administering, managing, winding up, controlling or otherwise dealing with the property or business of an insurance company that has failed to make a return pursuant to this Act shall make the required return. R.S.S. 1965, c.63, s.6; R.S.S. 1978, c.i-10, s.6. Statutory declaration 7 Upon receipt of a demand therefor from the superintendent in any case, an insurance company submitting a return under this Act shall, within the time specified in the demand, verify the cor rectness of the return by the statutory declaration of the person by whom the return is made. R.S.S. 1965, c.63, s.7; , c.49, s.3; R.S.S. 1978, c.i-10, s.7.

7 INSURANCE PREMIUMS TAX c. I-10 7 Extension of time 8 The superintendent may at any time extend the time for the making of a return. R.S.S. 1965, c.63, s.8; , c.49, s.3; R.S.S. 1978, c.i-10, s.8. Payment with return 9(1) Every insurance company shall, at the time of making a return, remit to the minister the amount of tax payable under this Act in respect of the period covered by the return. (2) Where an insurance company or its chief agent or attorney, as the case may be, fails to pay some or all of the tax as required by this Act, the company is liable to pay interest on the amount unpaid at the rate of six per cent per annum from the fifteenth day of March in the year in which that amount is payable until the day of payment. R.S.S. 1965, c.63, s.9; R.S.S. 1978, c.i-10, s.9. Records required and right to inspect 10(1) Every insurance company shall keep adequate books of account and records for the purposes of this Act, and if the books or records kept by any insurance company are, in the opinion of the superintendent, inadequate for the said purposes, he may prescribe the form of and the information to be contained in the books and records to be kept by that insurance company. (2) The superintendent or a person authorized by him in writing for the purpose may visit the place of business in Canada of an insurance company where the records respecting the business in Saskatchewan are maintained, and examine the books and records of the company for the purpose of verifying any return required by this Act. R.S.S. 1965, c.63, s.10; , c.49, s.4; R.S.S. 1978, c.i-10, s.10. ASSESSMENTS, APPEALS AND REFUNDS Power to make assessment 11 If an insurance company fails to make any return under this Act, or makes an insufficient or incorrect or false return, the superintendent may make an investigation as to the premium income of the insurance company and make his own valuation thereof; and thereupon the superintendent may proceed to assess and tax the same, and upon giving the insurance company a notice of assessment the tax is due and payable forthwith. R.S.S. 1965, c.63, s.11; , c.49, s.5; R.S.S. 1978, c.i-10, s.11. Examination of returns and assessment thereof 12(1) The superintendent shall cause all returns received by him to be examined as soon as practicable after receipt; and upon completion of the examination of an insurance company s return the superintendent shall, by assessment, verify or alter the amount of the tax as estimated by the insurance company in the return, and shall give a notice of the assessment to the insurance company, which notice shall be deemed to be given on the day on which it is mailed.

8 8 c. I-10 INSURANCE PREMIUMS TAX Payment of additional amount of tax (2) An additional amount of tax found due over the estimated amount, as shown by the notice of assessment, together with interest as specified in section 9, shall be paid by the insurance company to the superintendent not later than one month after the last day of the month in which the notice of assessment is given. R.S.S. 1965, c.63, s.12; , c.49, s.5; R.S.S. 1978, c.i-10, s.12. Refund of overpayment 13(1) Where the examination of a return discloses that an overpayment has been made by the insurance company, the superintendent shall advise the minister of that fact giving particu lars thereof and the minister shall cause a refund of the amount so overpaid to be made to the insurance company from the consoli dated fund, except that, where any further tax payable by that insurance company is due or accruing due, the amount so overpaid shall, to the extent thereof, be applied in satisfaction of that tax, and notice thereof shall be given to the insurance company, accom panied by the refund of any remainder of the amount overpaid that is not so applied. (2) A refund under this section may be made with the notice of assessment, or after giving the notice of assessment. R.S.S. 1965, c.63, s.13; , c.49, s.6; R.S.S. 1978, c.i-10, s.13. Power to reassess 14 Notwithstanding any prior assessments, or if no assessment has been made, an insurance company continues to be liable for any tax and to be assessed therefor, and the superintendent may at any time assess any insurance company for tax, interest and penalties, and may: (a) at any time, if the insurance company has made a misrepresentation or committed a fraud in making its return or supplying information under this Act; and (b) within six years from the day of the original assessment in any other case; reassess or make additional assessments upon any insurance com pany for tax, interest and penalties. R.S.S. 1965, c.63, s.14; , c.49, s.7; R.S.S. 1978, c.i-10, s.14. Appeal to Board of Revenue Commissioners 15(1) Except as otherwise provided in this Act, an insurance company that objects to the amount at which it is assessed, or that considers that it is not liable to taxation, may, within one month after the date of the giving of the notice of assessment provided for in this Act, serve a notice of appeal upon the Board of Revenue Commissioners. (2) The notice of appeal shall be in writing and shall be mailed by registered post addressed to the Secretary, Board of Revenue Commissioners, Regina, Saskatchewan. (3) The notice shall set out clearly the reasons for appeal and all facts relative thereto.

9 INSURANCE PREMIUMS TAX c. I-10 9 (4) Upon receipt of the notice the board shall duly consider the matter and affirm or amend the assessment of the superintendent and forthwith notify the appellant of its decision by registered post. R.S.S. 1965, c.63, s.15; , c.49, s.7; R.S.S. 1978, c.i-10, s.15. Appeal from decision of board 16 An appeal from a decision of the board and any further appeal shall be subject to and governed by sections 48 and 49 of The Department of Finance Act. R.S.S. 1965, c.63, s.16; , c.49, s.8; R.S.S. 1978, c.i-10, s.16. Due date of tax not affected by appeal 17 Neither the giving of a notice of appeal by an insurance com pany nor a delay in the hearing of the appeal affects in any way the due date, the interest or penalties, or any liability for payment pro vided by this Act in respect of a tax that is the subject matter of the appeal, or delays in any way the collection of the tax; but, in the event of the tax being set aside or reduced on appeal, the minister shall refund to the insurance company the amount of the tax or excess tax paid by it, and of any additional interest or penalty imposed and paid on the tax or excess tax. R.S.S. 1965, c.63, s.17; R.S.S. 1978, c.i-10, s.17. RECOVERY OF TAXES Tax constitutes a lien 18(1) A tax imposed or assessed under this Act forms a lien and charge in favour of Her Majesty on the entire assets of the estate of the insurance company in the hands of a trustee, and has priority over all other claims of every person, except claims secured by registered liens, charges or encumbrances thereon registered prior to the imposition or assessment. (2) The liens and charges created by this section and their priority shall not be lost or impaired by any neglect, omission or error of the superintendent, or of any agent or officer, or by the tak ing or failure to take proceedings to recover the taxes due, or by the tender or acceptance of a partial payment of the taxes, or by want of registration. R.S.S. 1965, c.63, s.18; , c.49, s.9; R.S.S. 1978, c.i-10, s.18. Filing of certificate 19(1) Where default is made in the payment of a tax that is due and payable under this Act, or a part of the tax, the superinten dent may issue his certificate stating that the tax was assessed, the amount thereof remaining unpaid, including interest and penalties, and the name of the insurance company by whom it is payable. (2) The certificate may be filed at any judicial centre with the local registrar of the Court of Queen s Bench or with the local clerk of the district court, as the case may require, and when so filed shall have the same force and effect and all proceedings may be taken thereon as if the certificate were a judgment for the recovery of a debt of the amount specified in the certificate.

10 10 c. I-10 INSURANCE PREMIUMS TAX (3) All reasonable costs and charges attendant upon the filing of the certificate shall be recoverable in like manner as the amount stated in the certificate. R.S.S. 1965, c.63, s.19; , c.49, s.9; R.S.S. 1978, c.i-10, s.19. Demand on third party 20(1) The superintendent may by letter, delivered personally or sent by registered mail, demand of any person indebted or about to become indebted to an insurance company liable for any tax, interest, penalties or costs under this Act, that the moneys other wise payable by him to the insurance company be, in whole or in part, paid over to the superintendent on account of the insurance company s liability under this Act. (2) The receipt of the superintendent for moneys so paid constitutes a good and sufficient discharge of the liability of the person indebted to such insurance company to the extent of the amount stated in the receipt. (3) A person who, after receipt of a demand pursuant to this sec tion, discharges any liability to an insurance company so liable under this Act is personally liable to Her Majesty to the extent of the liability so discharged as between him and the insurance com pany or to the extent of the liability of the insurance company for taxes, interest, penalties and costs, whichever is the lesser amount. R.S.S. 1965, c.63, s.20; , c.49, s.9; R.S.S. 1978, c.i-10, s.20. Default in payment of taxes 21 In case of default of payment of a tax imposed by this Act, the tax may be levied with costs by distress upon the goods and chattels wherever found of the insurance company liable therefor, under a warrant signed by the superintendent directed to a sheriff, and in such case the sheriff shall realize the amount of the tax in arrear and all costs by sale of those goods and chattels or so much thereof as may be necessary to satisfy the said warrant and costs. R.S.S. 1965, c.63, s.21; , c.49, s.9; R.S.S. 1978, c.i-10, s.21. Exercise of recovery powers 22 The powers conferred by this Act for the recovery of taxes by filing a certificate, by distress and by demand under section 20 may be exercised separately or concurrently or cumulatively, and the liability of an insurance company for the payment of a tax under this Act is not affected in any way by the fact that a fine or penalty has been imposed on or paid by it in respect of a contravention of this Act. R.S.S. 1965, c.63, s.22; R.S.S. 1978, c.i-10, s.22. OFFENCES AND PENALTIES Failure to register under section 3 23 Every insurance company that fails to comply with section 3 is guilty of an offence against this Act and liable on summary con viction to a fine of not less than $10 nor more than $200. R.S.S. 1965, c.63, s.23; R.S.S. 1978, c.i-10, s.23.

11 INSURANCE PREMIUMS TAX c. I Failure to make returns under section 5 or 6 to remit tax 24 Every insurance company that or person who fails to deliver a return pursuant to section 5 or 6 or to remit the amount of the tax pursuant to section 9 within the time prescribed therefor is liable, in addition to any other penalty, to a penalty of five per cent of the amount of the tax payable by the insurance company or $500, whichever is the lesser, and shall forthwith forward the amount of that penalty to the minister. R.S.S. 1965, c.63. s.24; R.S.S. 1978, c.i-10, s.24. Non-compliance with section For every default in complying with section 10, the insurance company and any person in default are each liable on summary conviction to a fine of not less than $10 for each day dur ing which the default continues. R.S.S. 1965, c.63, s.25; R.S.S. 1978, c.i-10, s.25. Contravention of Act an offence 26 Every person who contravenes any provision of this Act or the regulations other than sections 3 and 10 of this Act is guilty of an offence and liable on summary conviction to a fine of not less than $50 nor more than $500 and in default of payment to imprisonment for a term not exceeding three months. R.S.S. 1965, c.63, s.26; R.S.S. 1978, c.i-10, s.26. False statements 27 Every person who makes a false statement in any form or return prescribed by this Act or the regulations is guilty of an offence and liable on summary conviction to a fine of not less than $100 nor more than $500 and in default of payment to imprison ment for a term not exceeding three months. R.S.S. 1965, c.63, s.27; R.S.S. 1978, c.i-10, s.27. Liability or corporation officers 28 If a corporation is guilty of an offence under this Act, an officer, director or agent of the corporation who directed, authorized, assented to or acquiesced or participated in the commission of the offence is a party to and guilty of the offence. R.S.S. 1965, c.63, s.28; R.S.S. 1978, c.i-10, s.28. Notices in writing 29(1) Every notice and every demand that the superinten dent or an officer is authorized or required to give to or make on any insurance company or person under this Act shall be in writing directed to the company or person, and is sufficiently given or made if it is delivered personally to the company or person or if it is delivered at or is sent by registered mail addressed to the address of the company or person as stated in its or his last return made under this Act or as last known to the superintendent. (2) Service of a notice or demand shall be sufficiently proved by the affidavit of the person by whom the notice or demand is delivered or mailed and there shall be exhibited to the affidavit a copy or duplicate of the notice or demand and, in addition, in case of service by registered mail, the postmaster s receipt for the envelope containing the notice or demand. R.S.S. 1965, c.63, s.29; , c.49, s.9; R.S.S. 1978, c.i-10, s.29.

12 12 c. I-10 INSURANCE PREMIUMS TAX Onus of proof 30(1) In a prosecution for failure to deliver a return or for failure to pay the tax or to forward a penalty imposed by section 24 or to pay any interest payable under section 9, the onus of proving that the tax, penalty or interest was paid, as the case may be, as required by this Act shall be upon the accused. (2) An affidavit by an officer of the public service of the Govern ment of Saskatchewan, sworn before any commissioner for oaths or other person authorized to take affidavits, that he has charge of the appropriate records and that after careful examination and search of those records he has been unable to find in any given case that a return or remittance required by this Act has been received by the minister or in the Department of Finance or by the superintendent shall be received as prima facie evidence that the required return or remittance has not been received. R.S.S. 1965, c.63, s.30; , c.49, s.10; R.S.S. 1978, c.i-10, s.30. Limitation of prosecution 31 No prosecution for a violation of this Act or the regulations shall be commenced after six years from the date of the alleged violation. R.S.S. 1965, c.63, s.31; R.S.S. 1978, c.i-10, s.31. GENERAL Interchange of information 32 For the purposes of this Act, the minister may enter into an arrangement with the Government of Canada or of any province of Canada by which officers of such Government may be allowed to obtain information or inspect returns under this Act, provided that the arrangement includes reciprocal provision for such privileges to the Province of Saskatchewan. R.S.S. 1965, c.63, s.32; R.S.S. 1978, c.i-10, s.32. Delegation 33 The superintendent may authorize any officer of the Department of Finance to perform and exercise such of the duties imposed and powers conferred by this Act upon the superintendent as may, in the opinion of the superintendent, be conveniently per formed or exercised by that officer, and the performance or exer cise of those duties or powers by the officer so authorized shall be of the same force and effect as if they were performed or exercised by the superintendent , c.49, s.11; R.S.S. 1978, c.i-10, s.33. Regulations 34 For the purpose of carrying into effect the provisions of this Act according to their true intent or of supplying any deficiency therein, the Lieutenant Governor in Council may make such regulations not inconsistent with the spirit of this Act as are considered necessary or advisable, and such regulations shall have the same force and effect as if incorporated herein. R.S.S. 1965, c.63, s.34; R.S.S. 1978, c.i-10, s.34.

13 INSURANCE PREMIUMS TAX c. I The Crown bound 35 With respect to Her Majesty s engaging in and carrying on business under The Saskatchewan Government Insurance Act Her Majesty is bound by this Act. R.S.S. 1965, c.63, s.35; R.S.S. 1978, c.i-10, s.35.

14 Regina, Saskatchewan Printed by the authority of THE QUEEN S PRINTER Copyright 2012