Québec’s Bill 99 (Chapter 27), enacted on October 28, 2025, overhauls tax, reporting and premium‑tax rules for insurers, including premium‑tax alignment, interest‑deduction limits, new foreign‑asset reporting and a formalized increase to the QST applied to insurance premiums.
The Act consolidates a wide range of fiscal and tax measures announced in Québec’s 2024 update and the 2025 budget speech, and implements a number of federal‑parallel tax rules. For the insurance sector, the measure is consequential through changes to the tax on insurance premiums and its alignment with Québec sales tax rules, new constraints on interest and financing expense deductions, clarified dividend and mark‑to‑market treatments with an insurance carve‑out, new reporting duties for foreign property, and Québec sales tax (QST) changes that alter the tax treatment of counselling and psychotherapy services. Collectively, these provisions affect insurers’ taxable income, premium tax expense, compliance burden and operational practices across finance, actuarial, compliance and claims functions.
A key change aligns the tax on insurance premiums with Québec’s sales tax system and adjusts the formula used to calculate a prescribed premium. The law replaces a 9% reference in the sales‑tax text with 9.975% for the prescribed premium calculation. That rate change applies in respect of premiums paid after December 31, 2026, rather than taking immediate effect on assent. Insurers therefore have a window to adapt pricing, reserves and reporting practices.
The Act introduces a regime that limits deductions for excessive interest and financing expenses, targeting structures that route debt through related entities or across borders. Insurance groups that use intercompany loans or rely on reinsurance funding should expect some capital‑structure and transfer‑pricing implications, and may need to rework funding terms to avoid higher taxable income.
Reporting for foreign property is a notable operational change. Entities must file a prescribed return when the aggregate cost of foreign holdings exceeds $100,000. Penalties range from monthly fines for negligent omissions to larger percentage‑based penalties for prolonged non‑filing and substantial sanctions for knowingly false statements. Insurers with offshore investments, reinsurance placements or foreign trusts should map exposures and tighten controls promptly.
On benefits, the Act raises exemption amounts used to calculate RAMQ drug‑plan premiums (effective 2024) and exempts counselling and psychotherapy services from QST when provided by defined practitioners (effective June 20, 2024). These changes mainly affect group benefits carriers, TPAs and claims operations; updates to claims tax recovery, provider contracting and member communications will be required, though core policy terms are largely unchanged.
The law also contains technical tax adjustments, including new capital cost allowance classes related to CCUS and certain intangibles, tweaks to reserve rules, and refinements to intergenerational transfer provisions. These items are primarily the concern of M&A advisers, tax teams and actuaries.
Suggested next steps could include asking teams to map each provision to its effective date; running a focused tax sensitivity analysis on premium and interest‑limit impacts; inventorying foreign‑asset exposures against the $100,000 filing threshold; and reviewing whether benefits and claims contracts and adjudication workflows need updating. These actions can help translate the Act’s requirements into manageable workstreams.
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