New Tax Regs Could Shake Up U.S. Life Reinsurance Gameboard
December 7, 2019 by Allison Bell
The Internal Revenue Service (IRS) has completed work on a batch of Tax Cuts and Jobs Act of 2017 regulations that could, possibly, chase some non-U.S. reinsurers out of the U.S. life reinsurance market.
The IRS developed the regulations to implement the TCJA Base Erosion and Anti-Abuse Tax (BEAT) provisions. The BEAT provisions impose a new, 10% income tax increase on some U.S. companies that send cash to affiliates outside the United States.
Congress added the BEAT provisions in an effort to punish U.S. companies that shift, or pretend to shift, cash overseas simply to cut the amount of income the United States can tax.
The IRS is preparing to publish final BEAT regulations Friday, in the Federal Register. The agency has already put a preliminary version of the final rule, along with an introduction that summarizes the regulations and the comments on the draft version of the regulations, on the Federal Register website.
IRS officials have made two major sets of BEAT regulation decisions that could affect U.S. life insurers.
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