Life insurance: taxation and applicable deductions

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That being said, you will only need to declare it to the tax authorities if you decide to carry out a "buy-out". That is to say, when you have terminated the contract in whole or in part.

On the other hand, whether your redemption is total or partial, only the capital gains that you will realize will be taxed. In this case, your tax rate will depend on several parameters, including the age or duration of your contract and the payment period.


Income from life insurance contracts may be subject to progressive income tax canada email list rates. However, there is a possibility of taxing capital gains at a flat-rate withholding tax (PLF). Its rate varies depending on the duration of the contract, namely:

35% for contracts of less than 4 years
15% for those between 4 and 8 years old
7.5% for those over 8 years old
By default, income from payments made after September 27, 2017 is subject to a Single Flat-Rate Withholding Tax (PFU). Please note that the PFU is also known as a flat tax. The PFU rate is 12.8% and does not change depending on the duration of the contract. However, a tax reduction applies to all contracts opened for more than 8 years. It is 4,600 euros for a person living alone and 9,200 euros for a couple.