Taxing foreign reinsurers in the U.S. (World Reinsurance Report)

National Underwriter Property & Casualty-Risk & Benefits Management, September, 1990 by Tract, Harold M.

Taxing Foreign Reinsurers In The U.S. U.S. reinsurers are subject to federal income tax on their worldwide income. The Internal Revenue Code may also apply U.S. income tax to the receipts of foreign reinsurers when that income is "effectively connected with a U.S. trade or business. Foreign reinsurers, however, which do not have a U.S.

office or agent are not ordinarily subject to U.S. income tax on their U.S. premium income. Rather, the Internal Revenue Code under Section 4371 imposes an excise tax on premiums paid to foreign insurers and reinsurers. The excise tax, which is currently waived in 10 of the 55 tax treaties the United States has with foreign countries, is levied at the rate of one cent on each dollar paid for a policy issued by a foreign...

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