About Insurance Premium Tax

The Insurance Premium Tax is a tax on insurance premiums under contracts that insure residents or property located in British Columbia.

A taxable insurer means:

	an insurer who has business authorization under the Financial Institutions Act (FIA) to carry on insurance business
	ICBC
	companies that are registered under the Insurance (Captive Company) Act
	persons who are members of a reciprocal exchange that hold a valid permit under the FIA

The Financial Institution Commission (FICOM) maintains a list of insurers who are authorized under the FIA. All insurers on this list are taxable insurers. To obtain a copy of the list, contact FICOM or visit their website at www.fic.gov.bc.ca (opens in new window).

The following taxable insurers do not have to pay the Insurance Premium Tax:

	a fraternal benefit society
	a purely mutual corporation that earned 100% of its net premium income from the insurance of religious institutions, schools or charitable organizations
	a purely mutual corporation that earned at least 50% of its net premium income from the insurance of farm property

Premiums received by exempt insurers are not taxable. Exempt insurers are, however, required to file an Insurance Premium Tax Return of Taxable Premiums and to indicate the nature of the exemption claimed.

An unlicensed insurer is an insurer who has not been authorized under the Financial Institutions Act to carry on insurance business in the province. If insurance is purchased from an unlicensed insurer, the purchaser of the insurance must pay Insurance Premium Tax.

For a taxable insurer, taxable premiums are those B.C. premiums that were received or became receivable in the calendar year. A B.C. premium is a premium under a contract of insurance in respect of a person resident or property situated in B.C.