Overseas Reinsurance Implications of the Base Erosion and Anti-Abuse Tax (BEAT) Provisions of H.R. 1 – The Tax Cuts and Job Act
NEW YORK (January 17, 2018) — In response to H.R. 1 – the “Tax Cuts and Jobs Act” recently signed into law by President Donald Trump, RIMS, the risk management society™, published a Legislative Review to address certain international tax provisions included in the final bill. RIMS anticipates that the Base Erosion and Anti-Abuse Tax (BEAT) provisions, which will levy a 10% tax on transactions with foreign affiliates, will impact member organizations’ insurance and reinsurance programs.
Issued by RIMS External Affairs Committee, the newly released RIMS Legislative Review addresses the following questions regarding BEAT:
- How does BEAT change the taxation rules for non-domestic insurers and reinsurers?
- How are modified taxable income and base erosion minimum amount generally defined in this provision?
- What is a “foreign person” under the Act, and how are the “foreign person’s” relationships with the taxpayer defined?
- What is an “applicable taxpayer” under this provision?
- Is there any uncertainty or ambiguity as to whether the BEAT provision affects reinsurance premiums?
- What is the reasoning behind BEAT?
- What are the main concerns with BEAT as it applies to the insurance industry?
RIMS Legislative Review exploring the implications of the BEAT provision included in the Tax Cuts and Jobs Act can be found in RIMS Risk Knowledge library www.rims.org/RiskKnowledge.
RIMS Advocacy is guided by the RIMS mission. The Society advocates on behalf of risk professionals worldwide to Members of Congress, federal agencies, state legislative and regulatory bodies, and international regulatory authorities. For more information about RIMS Advocacy initiatives, visit www.RIMS.org.