PST on Insurance Premiums
Posted On: June 21, 2017
There has been a lot of talk lately regarding the Saskatchewan Party’s budget announcement on March 22, 2017 however one change that has gone relatively unnoticed is the implementation of PST on ALL insurance premiums.
We are by now all very aware of the change in tax from 5% to 6% however very few people are aware, at least until they receive their invoice, that this will also apply to their driver’s license, vehicle registration, extension automobile policies, home insurance, business insurance and so much more.
August 1, 2017 will mark the date that insurance policies will be subject to PST in Saskatchewan however this is not new in Canada with Ontario applying tax at 8% in July 2010, Manitoba applied tax at 8% in July 2012 and Newfoundland implemented a tax at a whopping 15% in July 2016.
While the implementation date of the tax is August 1, 2017 the tax will not apply to all transactions immediately:
- Tax will apply to new and renewal policies with an effective on or after August 1, 2017 along with all policy changes made after renewal
- Tax will not apply to new or renewal policies with an effective date prior to August 1, 2017 until the next renewal (i.e. Policy effective date July 31, 2017 will not be subject to PST until July 31, 2018)
- Tax will not apply to changes made throughout the policy term of a policy with an effective date prior to August 1, 2017 (i.e. Policy effective July 31, 2017 with a policy change made effective June 1, 2018 will not be subject to PST)
Your invoice or payment plan will indicate any applicable tax. Please review these documents for full details.
For more information, questions, comments or concerns visit www.finance.gov.sk.ca taxes or contact the Ministry of Finance at 1-800-667-6102.