The Government of Saskatchewan announced on Wednesday that it has extended the effective date for the application of provincial sales tax to insurance premiums following discussions with insurance industry associations.
The Ministry of Finance said in a press release that PST will apply to insurance premiums on Aug. 1, instead of July 1. The extension provides the industry with additional time to implement the application of PST and to address updates, the release suggested.
With these updates, PST of six per cent applies to all insurance premiums with an effective date on or after Aug. 1, 2017 sold by companies, agencies or groups where the insured person is a resident of Saskatchewan or the contract is for property located in Saskatchewan.
“The insurance industry associations have asked us for more time to implement this change and we want to ensure a smooth implementation,” Finance Minister Kevin Doherty said in the release. “We’ve listened and have agreed to move the effective date back one month as well as update the application of PST to ensure it is applied fairly across the industry.”
Updates ensuring PST on insurance premiums is applied equitably include the following:
Applying PST to self-insured group arrangements, also known as Administrative Services Only (ASO) arrangements;
Exempting PST from individual permanent life insurance policies in effect prior to Aug. 1, 2017. New policies effective after July 31, 2017 will be subject to PST; and
Clarifying that any endorsements added to insurance contracts with an effective date prior to Aug. 1, 2017 are not subject to PST.