GST/HST Guidance for Insurance Intermediaries

GST/HST Notice 325

David Afolabi
| 10/17/2023

In July 2023, the Canada Revenue Agency (CRA) provided guidance to help insurance intermediaries determine the application of the GST/HST on the services they provide to or on-behalf of insurers. These intermediaries generally include those referred to as managing general agents (MGAs), third party administrators (TPAs) or managing general underwriters (MGUs), whose activities may include: 

  • designing the insurance policy 
  • promoting and selling insurance policy 
  • recruiting, training and managing subcontracted agents 
  • paying insurance claims 
  • providing administrative services

Intermediaries may have an agreement directly with an insurer to provide their services, or they may enter into an agreement with another person that has an agreement with the insurer. Such agreements are critical in determining the application of GST/HST to supplies made by intermediaries.  

Possible GST/HST exemption for services provided by intermediaries 

Essentially, intermediaries are required to determine if the services they provide qualify as exempt “financial service” as defined under subsection 123(1) of the Excise Tax Act (ETA), taking into consideration the exclusion clauses under the provision. Intermediaries should charge GST/HST on their services that are not exempt “financial service” or exempt under any other provision of the ETA. 

Steps to determining GST/HST exemption  

The first step is to determine whether (under the agreement) the intermediary is making a single or multiple supplies for GST/HST purposes.  

Where a single supply is being made, it should be determined if such supply qualifies as exempt “financial service” under Schedule V. If not, then GST/HST should be charged on the supply accordingly. 

Where multiple supplies are being made, the intermediary should characterize each supply by considering its predominant element and whether the predominant element fits within the definition of financial service, to determine whether the supply is a taxable supply or an exempt supply for GST/HST purposes. Determining if the predominant element is excluded from the definition of financial services could be a complex process and should be analyzed carefully.

How can we help?

For assistance in determining the GST/HST tax status of supplies or for concerns regarding GST/HST Notice 325, please reach out to a member of our Indirect Tax Team.


This article has been prepared for the general information of our clients. Please note that this publication should not be considered a substitute for personalized advice related to your situation. 

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David Afolabi Crowe Soberman
David Afolabi
Senior Manager, Indirect Tax