From 1 April 2017 the compensation tax on insurance premiums
charged to insurers in Quebec, Canada, will be reduced to 0.3%.
From 1 April 2017, the compensation tax on insurance premiums
charged to insurers in Quebec, Canada, will be reduced from 0.48%
to 0.3%. This is the fourth change to the rate since the tax was
introduced on 31 March 2010. This new rate of 0.3% will be
effective until 31 March 2019, when the tax is due to be
abolished.
Background
The compensation tax on financial institutions in the province
can be attributed to Quebec's sales tax (QST) system. Under the
old QST rules prior to 31 March 2010, financial institutions were
zero-rated and application for an input tax refund (ITR) from the
financial institutions was made possible. To cover the cost of the
governing body which grants ITRs to suppliers of financial
services, the compensation tax came into being. Its original rate
was 0.3% on insurance premiums for the insurance industry.
