Tax wiki
s. 32
PART I — Income Tax · DIVISION B — Computation of Income · SUBDIVISION B — Income or Loss from a Business or Property · Special Cases
Insurance agents and brokers
Not yet annotated · Text current to 2026-06-21 · section last amended 2004-08-31
Current text
In computing a taxpayer’s income for a taxation year from the taxpayer’s business as an insurance agent or broker, no amount may be deducted under paragraph 20(1)(m) for the year in respect of unearned commissions from the business, but in computing the taxpayer’s income for the year from the business there may be deducted, as a reserve in respect of such commissions, an amount equal to the lesser of
the total of all amounts each of which is that proportion of an amount that has been included in computing the taxpayer’s income for the year or a preceding taxation year as a commission in respect of an insurance contract (other than a life insurance contract) that
the number of days in the period provided for in the insurance contract that are after the end of the taxation year
is of
the number of days in that period, and
the total of all amounts each of which is the amount that would, but for this subsection, be deductible under paragraph 20(1)(m) for the year in respect of a commission referred to in paragraph 32(1)(a).
Reserve to be included
(2)There shall be included as income of a taxpayer for a taxation year from a business as an insurance agent or broker, the amount deducted under subsection 32(1) in computing the taxpayer’s income therefrom for the immediately preceding year.
Additional reserve
(3)In computing a taxpayer’s income for a taxation year ending after 1990 from a business carried on by the taxpayer throughout the year as an insurance agent or broker, there may be deducted as an additional reserve an amount not exceeding
where the year ends in 1991, 90%,
where the year ends in 1992, 80%,
where the year ends in 1993, 70%,
where the year ends in 1994, 60%,
where the year ends in 1995, 50%,
where the year ends in 1996, 40%,
where the year ends in 1997, 30%,
where the year ends in 1998, 20%,
where the year ends in 1999, 10%, and
where the year ends after 1999, 0%
of the amount, if any, by which
the reserve that was deducted by the taxpayer under subsection 32(1) for the taxpayer’s last taxation year ending before 1991
exceeds
the amount deductible by the taxpayer under subsection 32(1) for the taxpayer’s first taxation year ending after 1990,
and any amount so deducted by the taxpayer for a taxation year shall be deemed for the purposes of subsection 32(2) to have been deducted for that year under subsection 32(1).
Source: Justice Laws Website. Not an official version.
Historic text
This section has not been amended since the start of the point-in-time record on 31 August 2004.
Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 32 links to the one before it.
Enacting and amending legislation
- R.S., 1985, c. 1 (5th Supp.), s. 32; 1994, c. 7, Sch. II, s. 19
Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.
Cross-references
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 32.