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Copyright 2000: Queens Printer,
St. John's, Newfoundland and Labrador, Canada

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Revised Statutes of Newfoundland 1990


CHAPTER I-11

AN ACT RESPECTING THE IMPOSITION OF A TAX ON INSURANCE COMPANIES

Analysis

1. Short title

2. Definitions

3. Imposition of tax

4. Company to send return to minister

5. Return by trustees, etc.

6. Statutory declaration

7. Extension of time

8. Payment of tax with return

9. Records to be kept by company

10. Power to make assessment

11. Examination of returns

12. Refund of overpayment

13. Power to reassess

14. Appeal to judge

15. Court of Appeal

16. Appeal not to affect due date of tax

17. Trustee and others to get certificate that no tax outstanding

18. Tax constitutes a lien

19. Notice of proceedings

20. Recovery of taxes by action

21. Issue of certificate

22. Demand on 3rd party

23. Distress

24. Exercise of recovery powers

25. Failure to pay tax or file returns

26. Penalty and interest reviewed

27. Remission

28. Failure to keep records

29. Violation of section 17

30. False returns

31. Penalty where no other penalty provided

32. Liability of company officers

33. Notices in writing

34. Affidavit that return or remittance not received in Department of Finance

35. Laying of information and hearings

36. Limitation of prosecutions

37. Fines part of Consolidated Revenue Fund

38. Interchange of information

39. Delegation of powers

40. Forms

41. Exemption from similar municipal taxes


Short title

1. This Act may be cited as the Insurance Companies Tax Act.

RSN1970 c177 s1

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Definitions

2. In this Act

(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 payable by reason of death does not exceed the sum of the amounts paid as consideration for the contract together with interest;

(b) "business transacted in the province" means

(i) in the case of insurance in respect of loss of or damage to property of all kinds, all contracts on which premiums are receivable from or in respect of persons whose property was situated in the province when their premiums became payable, and

(ii) in the case of other insurance, all contracts on which premiums are receivable from or in respect of persons who were residents of the province when their premiums became payable;

(c) "Canadian company" means a company formed or incorporated by an Act of the Parliament of Canada or of the Legislature of a province;

(d) "company" means a person, company, society, association, partnership, exchange or underwriter which carries on or transacts in the province a business of insurance to which the Insurance Companies Act or the Life and Accident Agents Licensing Act applies, or any other business of insurance, and includes 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 "Lloyd's" but does not include

(i) a purely mutual company in respect of a year in which the net premium income in the province of that mutual company is to the extent of not less than 50% derived from the insurance of farm or fishing property or wholly derived from the insurance of churches, schools, or other religious, educational, or charitable institutions,

(ii) a fraternal or sororal benefit society, or

(iii) a mutual benefit society;

(e) "dividend" without restricting the ordinary meaning of the word, includes an amount payable, or subject to be credited, by a company 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;

(f) "exchange" or "reciprocal or inter-insurance exchange" means a group of subscribers exchanging reciprocal contracts of indemnity of inter-insurance with each other through the same attorney;

(g) "foreign company" means a company formed or incorporated by the laws of a country other than Canada;

(h) "fraternal or sororal benefit society" means a society, order or voluntary association incorporated or formed to carry on for the purpose of making with its members only and not for profit contracts of life, accident or sickness insurance under which benefits may be paid only to its members or their beneficiaries in accordance with its constitution and laws and the laws of the province;

(i) "marine insurance" means insurance against marine losses, that is to say, the losses incident to marine adventure, and includes insurance that, by the express terms of a contract or by usage of trade, extends so as to protect the insured against losses on land or air or inland water risk that is incidental to a sea voyage;

(j) "minister" means the Minister of Finance;

(k) "mutual benefit society" means a mutual company formed for the purpose of providing sick and funeral benefits for its members or for this and other necessary or incidental purposes except life insurance;

(l) "mutual company" means a company without share capital or with guarantee capital stock subject to repayment by the company, in respect of which the dividend rate is limited by its Act or other instrument of incorporation which is empowered to undertake mutual insurance exclusively;

(m) "mutual insurance" means a contract of insurance in which the consideration is not fixed or certain at the time the contract is made and is to be determined at the termination of the contract or at fixed periods during the term of the contract according to the experience of the insurer in respect of all similar contracts whether or not the maximum amount of that consideration is predetermined;

(n) "policyholder" includes the personal representative or beneficiary of the policyholder;

(o) "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 subscriber to a reciprocal or inter-insurance exchange and the necessary operation expenses of the exchange;

(p) "return" means a return required to be filed under this Act or the regulations and includes information obtained under this Act from the records of a company, or from a 3rd party where that information relates to the company;

(q) "sheriff" means the Sheriff of Newfoundland and includes sub-sheriffs and deputy sheriffs;

(r) "tax" means a tax imposed or assessed under this Act and includes interest payable in respect of the tax and a penalty imposed under this Act; and

(s) "year" means calendar year.

RSN1970 c177 s2; 1971 No7 s2; 1971 No14 s2;
1980 c10 s1; 1980 c22 s2

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Imposition of tax

3. (1) A company shall pay to the minister for the use of the province, a tax equal to 4% of the gross premiums that become payable to it during the year in respect of business transacted by it in the province, other than premiums in respect of reinsurance ceded to the company by other companies and premiums or other consideration becoming payable to the company in respect of annuities, after deducting from those gross premiums a sum equal to

(a) the cash value of dividends paid or credited to policyholders in that year; and

(b) the premiums returned by the company in that year.

(2) Notwithstanding subsection (1), every company shall pay to the minister for the use of the province, a tax equal to

(a) 3% on 3/12; and

(b) 4% on 9/12

of the gross premiums that become payable to it during the 1987 taxation year in respect of business transacted by it in the province, other than premiums in respect of reinsurance ceded to the company by other companies and premiums or other consideration becoming payable to the company in respect of annuities, after deducting from the gross premiums a sum equal to

(c) the cash value of dividends paid or credited to policy-holders in the 1987 taxation year; and

(d) the premiums returned by the company in the 1987 taxation year.

(3) This Act does not apply to premiums receivable in respect of contracts of marine insurance.

RSN1970 c177 s3; 1979 c26 s1; 1980 c10 s2;
1987 c23 s1

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Company to send return to minister

4. (1) A company liable to pay the tax shall, before March 21 in each year and without notice or demand by the minister, send to the minister a return in a form prescribed by the minister which shows the amount of tax payable by the company for the preceding year, together with other information which the minister considers necessary.

(2) Where the minister knows or suspects that a company which is liable to pay the tax has ceased or is about to cease transacting business in the province, the minister may by notice require that company immediately to file a return showing the amount of tax payable by the company up to the time when the return is filed, together with other information which the minister considers necessary.

(3) Where the minister for any purpose of this Act wishes information or a return from a company which has not made a return under this Act, or wishes additional information or a further return from a company which has made a return, the minister may demand from the company the information or return desired, and that company shall provide or deliver the information to the minister or make the return with him or her within the time, specified in the demand.

RSN1970 c177 s4; 1971 No7 s3; 1971 No14 s2;
1983 c16 s1

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Return by trustees, etc.

5. A trustee in bankruptcy, assignee, liquidator, receiver, administrator and other person administering, managing, winding up, controlling or otherwise dealing with the property or business of a company which has failed to file a return shall file the return.

RSN1970 c177 s5

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Statutory declaration

6. Upon receipt of a demand from the minister, a company which is filing a return shall, within the time specified in the demand, verify the correctness of the return by the statutory declaration of the person who files the return on behalf of the company.

RSN1970 c177 s6

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Extension of time

7. The minister may at any time extend the time for the filing of a return.

RSN1970 c177 s7

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Payment of tax with return

8. (1) Where a company sends a return under subsection 4(1), it shall remit to the minister, together with the return, the amount of the tax, payable by it in respect of the period covered by the return.

(2) Where a company fails to pay the tax or a part of the tax where it is payable under subsection (1), the company shall pay interest to the minister at the rate of 1 1/2% per month on the tax or the unpaid part of the tax from the date on which it was payable until the date of payment.

(3) In this section "month" includes part of a month.

RSN1970 c177 s8; 1971 No7 s4; 1971 No14 s2;
1979 c26 s2; 1981 c71 s2

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Records to be kept by company

9. (1) A company shall keep books of account or other records which are, in the opinion of the minister, adequate for the purposes of this Act and where the books or other records kept by a company are, in the minister's opinion, inadequate for the purpose of this Act, the minister may prescribe the form of and the information to be contained in the books or other records to be kept by that company.

(2) The minister or a person authorized by the minister for the purpose may visit the head office or other premises of a company in the province or the place of business in Canada of a Canadian or foreign company where the records respecting the business transacted by the company in the province are kept and examine the books and records of the company for the purpose of verifying a return.

RSN1970 c177 s9

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Power to make assessment

10. Where a company fails to make a return or makes an incorrect or false return, the minister may make an investigation as to the premium income of the company and make his or her own valuation of the premium income, and the minister may proceed to assess and tax that income and where the minister gives a notice of assessment to the company the tax is due immediately.

RSN1970 c177 s10

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Examination of returns

11. (1) The minister shall direct all returns which the minister receives to be examined as soon as possible after he or she receives them, and after the minister has examined the return of a company the minister shall, by assessment, verify or alter the amount of the tax as estimated by the company in the return and shall give a notice of the assessment to the company where the amount of the tax has been altered and the notice shall be considered to be given on the day on which it is mailed.

(2) The company shall, not later than 1 month after the last day of the month in which the notice of assessment is given under subsection (1), pay to the minister an additional amount of tax found due in excess of the amount paid by the company and as shown by the notice of assessment, together with interest at the rate of 6% a year from March 20 in the year in which the tax is payable until the date of payment.

RSN1970 c177 s11; 1983 c16 s2; 1988 c21 s1

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Refund of overpayment

12. (1) Where the examination of a return discloses that a company has made an overpayment, the minister shall direct a refund of the amount which the company has overpaid to be made to the company, except that, where a further tax payable by that company is due or accruing due, the minister may apply the amount of the overpayment in satisfaction of that tax and the minister shall give notice of it to the company, together with a refund of a remainder of the overpayment which is not so applied.

(2) The minister may make a refund under subsection (1) with the notice of assessment or after giving the notice of assessment.

RSN1970 c177 s12

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Power to reassess

13. Notwithstanding a prior assessment, or where no assessment has been made, a company continues to be liable for tax and to be assessed for the tax, and the minister may at any time assess a company for tax, interest and penalties, and may

(a) at any time, where the company has made a misrepresentation or committed a fraud in making its return or supplying information under this Act; or

(b) within 6 years from the date of the original assessment in any other case,

reassess or make additional assessments upon a company for tax, interest and penalties.

RSN1970 c177 s13

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Appeal to judge

14. (1) A company which objects to the amount at which it is assessed, or which considers that it is not liable to taxation may appeal to a judge of the Trial Division.

(2) A company referred to in subsection (1), in this section referred to as "the appellant", shall, within 60 days after the minister has given a notice of assessment under this Act, serve upon the minister a written notice of its intention to appeal to a judge of the Trial Division and shall file a copy of the notice in the Registry of the Supreme Court.

(3) The notice of appeal shall set out the grounds of the appeal and shall be signed by the appellant or by its solicitor or agent.

(4) Within 14 days after the service of the notice of appeal on the minister the appellant shall apply to the judge for the appointment of a day for the hearing of the appeal and, not less than 14 days before the hearing, the appellant shall serve upon the minister a written notice of the day appointed for the hearing.

(5) The judge shall hear the appeal and the evidence brought forward before him or her by the appellant and the minister in a summary manner and shall decide the matter of the appeal.

(6) Upon the request of the appellant or the minister the judge may hear the appeal in private.

(7) The minister shall produce before the judge on the hearing of the appeal all papers and documents which are in his or her possession and which may affect the matter of the appeal.

(8) The judge may award costs in an appeal under this section for or against the minister and may fix the amount of the costs.

RSN1970 c177 s14; 1974 No57 Sch C;
1986 c42 Sch A

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Court of Appeal

15. (1) An appeal lies from an order or decision of the judge given under section 14 to the Court of Appeal upon a point of law raised upon the hearing of the appeal under section 14 and the practices and procedure under the Judicature Act, and the Rules of the Supreme Court, 1986 made under that Act apply to proceedings under this section.

(2) The Court of Appeal may award costs in an appeal under subsection (1) for or against the minister and may fix the amount of the costs.

1986 c42 Sch B

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Appeal not to affect due date of tax

16. Neither the giving of a notice of appeal by a company nor a delay in the hearing of the appeal affects the due date, the interest or penalties, or a liability for payment provided by this Act in respect of a tax that is the subject-matter of the appeal, or delays the collection of the tax, but, where the tax is set aside or is reduced on appeal, the minister shall refund to the company the amount of the tax or excess which it has paid, together with additional interest or penalty which was imposed upon and paid by the company on the tax or excess tax.

RSN1970 c177 s16

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Trustee and others to get certificate that no tax outstanding

17. No assets of a company or of the estate of a company shall be distributed by a trustee in bankruptcy, assignee, liquidator, receiver, administrator, or other similar person, until the minister has given a certificate that no unpaid assessment of tax, interest and penalties properly chargeable against the property of the company remains outstanding.

RSN1970 c177 s17

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Tax constitutes a lien

18. (1) A tax, together with interest on it, and a penalty in respect of the tax constitute a lien or charge in favour of the Crown on the entire assets of the estate of the company in the hands of a trustee and have priority over all other claims of every person, except claims secured by registered liens, charges or encumbrances registered before the imposition or assessment of the tax.

(2) The liens and charges created by this section and their priority shall not be lost or impaired by neglect, omission or error of the minister or of an agent or officer of the minister or by the taking of or failure to take proceedings to recover the taxes, interest or penalties due or by the tender or acceptance of a partial payment of the taxes, interest or penalty.

RSN1970 c177 s18

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Notice of proceedings

19. Before taking proceedings for the recovery of a tax, the minister shall give notice to the company of his or her intention to take proceedings but failure to give notice under this section does not affect the validity of proceedings taken to recover the tax.

RSN1970 c177 s19

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Recovery of taxes by action

20. The minister may recover the amount of the tax that is due by action in a court as a debt due the Crown and the court may award costs in the action for or against the minister.

RSN1970 c177 s20

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Issue of certificate

21. (1) Where a company fails to pay the tax or a part of it, the minister may issue a certificate stating that the tax was imposed or assessed, the amount of the tax remaining unpaid, and the name of the company by which it is payable.

(2) The minister may file a certificate issued under subsection (1) in the Registry of the Supreme Court and, where the minister has filed it, the certificate has the same effect and all proceedings may be taken on it as if it were a judgment for the recovery of a debt of the amount specified in the certificate.

(3) The minister may recover all reasonable costs and charges attendant upon the filing of a certificate under subsection (2) in the same manner as the amount stated in the certificate.

RSN1970 c177 s21

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Demand on 3rd party

22. (1) The minister may by letter delivered personally or sent by registered mail to a person who is indebted or is about to become indebted to a company liable for payment of the tax demand that that person pay to the minister on account of that company's liability to the minister under this Act the whole or part of the money otherwise payable by that person to the company.

(2) The receipt of the minister for money paid to the minister under subsection (1) constitutes a sufficient discharge of the liability of the person indebted to the company to the extent of the amount stated in the receipt.

(3) A person who, after he or she receives a demand from the minister under subsection (1), discharges any of his or her liability to a company referred to in that subsection is personally liable to the minister to the extent of the liability so discharged as between that person and the company or to the extent of the liability of the company for taxes, whichever is the lesser amount.

RSN1970 c177 s22

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Distress

23. The minister may levy the amount of the tax that is due by distress upon the goods and chattels wherever found of the company liable for the tax under a warrant signed by the minister and directed to the sheriff and the sheriff shall realize the amount of the tax in arrears and all costs by sale of those goods and chattels or so much of those goods and chattels as may be necessary to satisfy the warrant and costs.

RSN1970 c177 s23

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Exercise of recovery powers

24. The powers conferred by this Act for the recovery of taxes by action in court, by filing a certificate, by distress and by demand under section 22 may be exercised separately or concurrently or cumulatively and the liability of a company for the payment of a tax is not affected by the fact that a fine or penalty has been imposed on or paid by it in respect of a contravention of this Act.

RSN1970 c177 s24

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Failure to pay tax or file returns

25. A company or person who fails to pay the tax or part of the tax under section 3 or 8 or to file a return under section 4 or 5 in accordance with those sections is liable, in addition to another penalty, to a penalty of 6% of the amount of the tax payable by the company or $500, whichever is the lesser, and shall immediately forward the amount of the penalty to the minister.

RSN1970 c177 s25

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Penalty and interest reviewed

26. (1) A company or person who is dissatisfied by a penalty or interest imposed under sections 8 and 25 may apply to the minister for a review of the amount fixed; and the minister, after considering the application, shall confirm or amend the amount imposed by way of penalty or interest, and where the minister is satisfied that no loss has been sustained by the Crown, revoke the imposition of the penalty or interest and notify the company or person accordingly.

(2) The amount of penalty or interest fixed in the notification given under this section shall, for the purpose of this Act, be considered to be the amount fixed by the minister.

1979 c26 s3

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Remission

27. (1) Notwithstanding another Act or another provision of this Act, the minister, where the minister considers it appropriate to do so, may remit a penalty or interest imposed under sections 8 and 25.

(2) A remission under this section may be total or partial, conditional or unconditional, and may be granted whether before or after or pending a suit or proceeding for the recovery of a penalty or interest and before or after a payment of the penalty or interest has been made or enforced by process or execution.

1979 c26 s3

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Failure to keep records

28. A company that fails to comply with section 10 is guilty of an offence and liable on summary conviction to a fine of not less than $10 for each day it fails to comply with that section.

RSN1970 c177 s26

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Violation of section 17

29. A person who violates section 17 is guilty of an offence and liable on summary conviction to a fine of not more than $200.

RSN1970 c177 s27

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False returns

30. A person who makes or assents to or acquiesces in the making of a false or deceptive statement in a form or return filed under this Act is guilty of an offence and liable on summary conviction to a fine of not less than $100 and not more than $500 and in default of payment to imprisonment for a term not exceeding 3 months.

RSN1970 c177 s28

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Penalty where no other penalty provided

31. A person who violates this Act is guilty of an offence and, where no other penalty is provided, is liable on summary conviction to a fine of not less than $50 and not more than $500 and in default of payment to imprisonment for a term not exceeding 3 months.

RSN1970 c177 s29

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Liability of company officers

32. Where a company is guilty of an offence under this Act, the officer, director, or agent of the company who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence.

RSN1970 c177 s30

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Notices in writing

33. (1) A notice and a demand that the minister or an officer is authorized or required to give or to make on a 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 to the last known address of the company or personally to the 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 or her last return made under this Act or as last known to the minister.

(2) Service of a notice or demand shall be sufficiently proved by the affidavit of the person by whom the notice of demand is delivered or mailed and there shall be attached to that affidavit a copy or duplicate of the notice or demand and, in addition, in case of service by registered mail, the postal receipt for the envelope containing the notice or demand.

RSN1970 c177 s31

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Affidavit that return or remittance not received in Department of Finance

34. An affidavit by an officer of the Department of Finance, sworn or affirmed before a person authorized to take affidavits, that he or she has charge of the appropriate records and that after careful examination and search of those records he or she has been unable to find that a return or remittance required by this Act has been received in that department shall be admissible as presumptive evidence that the required return or remittance has not been received.

RSN1970 c177 s32; 1985 c11 s32

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Laying of information and hearings

35. (1) An information or complaint under this Act may be laid or made by a person authorized under this Act by the minister.

(2) An information or complaint for contravening this Act may be for 1 or more offences and an information, complaint, warrant, conviction, or other proceeding in a prosecution under this Act is not objectionable or insufficient because of the fact that it relates to 2 or more offences.

RSN1970 c177 s33

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Limitation of prosecutions

36. An information in respect of an offence against this Act shall be laid within 6 years from the date of the offence.

RSN1970 c177 s34

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Fines part of Consolidated Revenue Fund

37. All fines recovered under this Act shall be paid to the minister and shall form part of the Consolidated Revenue Fund.

RSN1970 c177 s35

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Interchange of information

38. For the purpose of this Act the minister may enter into an arrangement with the Government of Canada or of another province by which officers of that government may be allowed to obtain information or inspect returns under this Act where the arrangement includes provision for granting reciprocal privileges to the province.

RSN1970 c177 s36

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Delegation of powers

39. The minister may authorize an officer of the Department of Finance to perform and exercise those duties imposed and powers conferred by this Act upon the minister that may, in the opinion of the minister, be conveniently performed or exercised by that officer and the performance or exercise of those duties or powers by the officer so authorized shall be of the same effect as if they were performed or exercised by the minister.

RSN1970 c177 s37

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Forms

40. The minister may prescribe those forms that the minister considers appropriate for use under this Act.

RSN1970 c177 s38

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Exemption from similar municipal taxes

41. (1) Where a company pays a tax under this Act, it is not liable to a similar tax imposed upon or collected from it by a municipality.

(2) In this section, municipality means the City of St. John's, the City of Corner Brook, the City of Mount Pearl and a town, community or region established or continued under the Municipalities Act.

RSN1970 c177 s40; 1979 c33 Sch C; 1989 c12 s16

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