74.1 (1) Every life insurance corporation that carries on business in Ontario at any time in a taxation year shall pay a tax under this section for the taxation year equal to the amount, if any, by which, (a) 1.25 per cent of that proportion of its taxable paid-up capital for the taxation year determined under this section that the number of days in the taxation year after April 30, 1992 is of 365, exceeds, (b) the amount of tax payable by the corporation under Parts II and II.1 for the taxation year, after all deductions from tax to which the corporation is entitled for the year under those Parts.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Taxable paid-up capital (2) The taxable paid-up capital for a taxation year of a life insurance corporation that is resident in Canada at any time in the taxation year is the amount, if any, by which the total of, (a) the proportion of the total of, (i) its capital for the taxation year as determined under subsection (4), and (ii) the amount, if any, determined under subsection (6) for the taxation year in respect of the capital of its foreign insurance subsidiaries, if any, that the corporation’s Canadian reserve liabilities as at the end of the taxation year is of the total of, (iii) its total reserve liabilities as at the end of the taxation year, and (iv) the amount, if any, determined under subsection (7) in respect of the total reserve liabilities of its foreign insurance subsidiaries, if any; and (b) the amount determined for the taxation year in respect of the corporation under subparagraph 190.11 (b) (ii) of the Income Tax Act (Canada), exceeds the total of, (c) its capital allowance for the taxation year; and (d) that proportion of the amount, if any, by which the total of the amounts determined under clauses (a) and (b) for the taxation year exceeds the amount determined under clause (c) for the taxation year that is deemed under the rules prescribed by the regulations to have been used by the corporation in Canada but not in Ontario.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Same (3) The taxable paid-up capital for a taxation year of a life insurance corporation that throughout the taxation year is not resident in Canada is the amount, if any, by which, (a) its capital for the taxation year as determined under subsection (5), exceeds the total of, (b) its capital allowance for the taxation year; and (c) that proportion of the amount, if any, by which its capital for the taxation year exceeds its capital allowance for the taxation year that is deemed under the rules prescribed by the regulations to have been used by the corporation in Canada but not in Ontario.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Capital, resident life insurance corporation (4) For the purposes of this section, the capital for a taxation year of a life insurance corporation that is resident in Canada at any time in the taxation year is the amount, if any, by which the total at the end of the taxation year of, (a) the amount of its long-term debt; and (b) the amount of its capital stock or, in the case of a corporation incorporated without share capital, the amount of its members’ contributions, plus the amount of its retained earnings, contributed surplus and any other surpluses, exceeds the total at the end of the year of, (c) the amount of its deferred tax debit balance or future tax assets; and (d) the amount of any deficit deducted in computing its shareholders’ equity.  1994, c. 14, s. 32 (1); 2001, c. 23, s. 49 (1); 2004, c. 16, s. 2 (2). Capital, non-resident life insurance corporation (5) For the purposes of this section, the capital for a taxation year of a life insurance corporation that throughout the taxation year is not resident in Canada is the total at the end of the taxation year of, (a) the amount equal to, (i) the greater of its surplus funds derived from operations or its attributed surplus for the year if the year commenced before the day subsection 2 (10) of Schedule B to the Strengthening Business through a Simpler Tax System Act, 2007 comes into force, or (ii) if the year commenced on or after the day described in subclause (a) (i), the greater of, (A) the amount, if any, by which its surplus funds derived from operations, as of the end of the taxation year, exceeds the total of all amounts each of which is, (1.)  an amount on which it was required or would have been required, but for subsection 219 (5.2) of the Income Tax Act (Canada), to have paid tax under Part XIV of that Act for a previous taxation year, less the portion, if any, of the amount on which tax was payable, or would have been payable, described in subparagraph 219 (4) (a) (i.1) of that Act, or (2.)  an amount on which it was required or would have been required, but for subsection 219 (5.2) of the Income Tax Act (Canada), to have paid tax under subsection 219 (5.1) of that Act for the taxation year because of the transfer of an insurance business to which subsection 138 (11.5) or (11.92) of that Act applied, and (B) its attributed surplus for the taxation year, as determined under subsection 2400 (1) of the regulations made under the Income Tax Act
(Canada); (b) any other surpluses relating to its insurance businesses carried on in Canada; (c) the amount of its long-term debt that may reasonably be regarded as relating to its insurance businesses carried on in Canada; and (d) the amount, if any, by which, (i) the amount of its reserves for the year, other than its reserves in respect of amounts payable out of segregated funds, that may reasonably be regarded as having been established in respect of its insurance businesses carried on in Canada, exceeds the total of, (ii) all amounts each of which is the amount of a reserve, other than a reserve described in subparagraph 138 (3) (a) (i) of the Income Tax Act (Canada), to the extent that it was included in the amount determined under subclause (i) and was deducted in computing its income under Part II for the taxation year, (iii) all amounts each of which is the amount of a reserve described in subparagraph 138 (3) (a) (i) of the Income Tax Act (Canada), to the extent that it was included in the amount determined under subclause (i) and was deductible under subparagraph 138 (3) (a) (i) of the Income Tax Act (Canada), as that subparagraph applies for the purposes of Part II of this Act, in computing its income under Part II for the taxation year, and (iv) all amounts each of which is the amount outstanding at the end of the taxation year, including any accrued interest, in respect of a policy loan within the meaning assigned by paragraph 138 (12) (k.1) of the Income Tax Act
(Canada) that was made by the corporation, to the extent that it was deducted in computing the amount determined under subclause (iii).  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2); 2007, c. 11, Sched. B, s. 2 (10). Capital, foreign insurance subsidiaries (6) The amount determined for a taxation year in respect of the capital of the foreign insurance subsidiaries of a particular life insurance corporation is the total of all amounts each of which is the amount determined in respect of a foreign insurance subsidiary of the particular corporation equal to the amount, if any, by which, (a) the amount that would be the capital of the subsidiary for its last taxation year ending at or before the end of the particular corporation’s taxation year, if the subsidiary were a life insurance corporation resident in Canada at any time in that year, exceeds the total of all amounts each of which is, (b) an amount included under clause (a) in respect of a share of the subsidiary’s capital stock or its long-term debt that was owned by, (i) the particular corporation, (ii) a subsidiary of the particular corporation, (iii) a corporation that is resident in Canada, carried on a life insurance business in Canada at any time in its last taxation year ending at or before the end of the particular corporation’s taxation year and that is, (A) a
corporation of which the particular corporation is a subsidiary, or (B) a subsidiary of a corporation described in sub-subclause (A), or (iv) a subsidiary of a corporation described in subclause (iii); or (c) an amount included under clause (a) in respect of any surplus of the subsidiary contributed by a corporation described in any of subclauses (b) (i) to (iv), other than an amount included under clause (b).  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Total reserve liabilities, foreign insurance subsidiary (7) The amount determined for a taxation year in respect of the total reserve liabilities of the foreign insurance subsidiaries of a particular life insurance corporation is the total of all amounts each of which would be the total reserve liabilities, within the meaning assigned by subsection 2405 (3) of the Regulations made under the Income Tax Act (Canada), of a foreign insurance subsidiary of the particular corporation as at the end of the subsidiary’s last taxation year ending at or before the end of the particular corporation’s taxation year, if the subsidiary were required by law to report to the Superintendent of Financial Institutions for that year.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Capital allowance (8) For the purposes of this section, the capital allowance for a taxation year of a life insurance corporation that carries on business in Canada at any time in the year is the total of, (a) $10,000,000; (b) 1/2 of the amount, if any, by which the lesser of, (i) $50,000,000, and (ii) its taxable capital employed in Canada for the year, exceeds $10,000,000; (c) 1/4 of the amount, if any, by which the lesser of, (i) $100,000,000, and (ii) its taxable capital employed in Canada for the year, exceeds $50,000,000; (d) 1/2 of the amount, if any, by which the lesser of, (i) $300,000,000, and (ii) its taxable capital employed in Canada for the year, exceeds $200,000,000; and (e) 3/4 of the amount, if any, by which its taxable capital employed in Canada for the year exceeds $300,000,000.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Exception (9) Despite subsection (8), if a life insurance corporation is related at the end of a taxation year to another life insurance corporation that carries on business in Canada, its capital allowance for the taxation year is nil, subject to subsections (10), (11) and (12).  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Allocation, related group (10) A life insurance corporation that carries on business in Canada at any time in a taxation year and is related at the end of the taxation year to another life insurance corporation that carries on business in Canada may file with the Minister, on behalf of the related group of life insurance corporations of which the corporation is a member, an agreement under which an amount that does not exceed the total of the following amounts is allocated for the taxation year among the members of the related group: (a) $10,000,000; (b) 1/2 of the amount, if any, by which the lesser of, (i) $50,000,000, and (ii) the total of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group, exceeds $10,000,000; (c) 1/4 of the amount, if any, by which the lesser of, (i) $100,000,000, and (ii) the total of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group, exceeds $50,000,000; (d) 1/2 of the amount, if any, by which the lesser of, (i) $300,000,000, and (ii) the total of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group, exceeds $200,000,000; and (e) 3/4 of the amount, if any, by which the total of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group, exceeds $300,000,000.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Allocation by Minister (11) The Minister may request a life insurance corporation that carries on business in Canada at any time in a taxation year and that, at the end of the taxation year, is related to another life insurance corporation that carries on business in Canada to file with the Minister an agreement referred to in subsection (10) and, if the corporation does not file the agreement within thirty days after receiving the request, the Minister may allocate among the members of the related group of life insurance corporations of which the corporation is a member for the year an amount not exceeding the total that would be determined under clauses (10) (a) to (e) in respect of the related group.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Same (12) For the purposes of this section, the least amount allocated for a taxation year to a member of a related group under an agreement described in subsection (10) or by the Minister under subsection (11) is the capital allowance for the taxation year of that member.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Taxable capital employed in Canada (13) For the purposes of this section, the taxable capital employed in Canada of a life insurance corporation for a taxation year is, (a) in the case of a life insurance corporation that is resident in Canada at any time in the taxation year, the total of the amounts determined under clauses (2) (a) and (b) in respect of the corporation for the taxation year; or (b) in the case of a life insurance corporation that throughout the taxation year is not resident in Canada, its capital for the taxation year.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Application of Income Tax Act (Canada) (14) Subsections 181 (3) and (4) of the Income Tax Act (Canada), with such modifications as the circumstances require, and subsections 190 (1.1) and 190.15 (5) and (6) of that Act apply for the purposes of this section and, in the application of those subsections, (a) references to this Part shall be read as references to this section; and (b) the references in subsections 190.15 (5) and (6) to a corporation’s capital deduction shall be read as references to its capital allowance determined under this section.  1994, c. 14, s. 32 (1); 2004, c. 16, s. 2 (2). Definitions (15) In this section, “foreign insurance subsidiary”, of a particular life insurance corporation at any time, means a non-resident corporation that, (a) carried on a life insurance business throughout its last taxation year ending at or before that time, (b) did not carry on a life insurance business in Canada at any time in its last taxation year ending at or before that time, and (c) is at that time, (i) a subsidiary of the particular corporation, and (ii) not a subsidiary of any corporation that is resident in Canada, carried on a life insurance business in Canada at any time in its last taxation year ending at or before that time and is a subsidiary of the particular corporation; (“filiale d’assurance étrangère”) “long-term debt”, of a life insurance corporation or of a foreign insurance subsidiary of a life insurance corporation, means its subordinated indebtedness, within the meaning assigned by the Insurance Companies Act (Canada), evidenced by obligations issued for a term of not less than five years; (“passif à long terme”) “reserves”, in respect of a life insurance corporation for a taxation year, means the amount at the end of the year of all of the corporation’s reserves, provisions and allowances, other than allowances in respect of depreciation or depletion, and includes any provision in respect of deferred taxes or future tax liabilities; (“réserves”) “subsidiary”, of a corporation (in this definition referred to as the “parent corporation”), means a corporation not less than 90 per cent of the issued and outstanding shares of each class of the capital stock of which belong to, (a) the parent corporation, (b) a corporation that is a subsidiary of the parent corporation, or (c) any combination of corporations each of which is a corporation described in clause (a) or (b); (“filiale”) “surplus funds derived from operations” means, in respect of a life insurance corporation as of the end of a taxation year, (a) the amount that would be its surplus funds derived from operations at that time under paragraph 138 (12) (o) of the Income Tax Act (Canada) as that paragraph read on September 13, 1988, if the taxation year commenced before April 30, 1992, or (b) the amount that would be its surplus funds derived from operations at that time under subsection 138 (12) of the Income Tax Act (Canada), computed as if no tax were payable under Part I.3 or VI of that Act or under this section for the year, if the taxation year commenced on or after April 30, 1992. (“fonds excédentaire résultant de l’activité”)  1994, c. 14, s. 32 (1); 2001, c. 23, s. 49 (2); 2004, c. 16, s. 2 (2); 2007, c. 11, Sched. B, s. 2 (11). Section Amendments with date in force (d/m/y) 1994, c. 14, s. 32 (1, 2) - 01/05/1992 2001, c. 23, s. 49 (1, 2)
- 05/12/2001 2004, c. 16, s. 2 (2)
- 01/01/2004 2007, c. 11, Sched. B, s. 2 (10, 11) - 04/06/2007 Tax in respect of benefit plan