Investment - Articles - Global insurers call for PFIC guidance from US Treasury


The Global Federation of Insurance Associations (GFIA) has written to the US Treasury to call for guidance to assist insurers and their investors in complying with the Passive Foreign Investment Company (PFIC) insurance exemption, as amended by the 2017 US tax reform law.

 GFIA said that such guidance would be essential in 2018, since PFIC classification for the year is irreversible. Companies need the guidance to determine whether they will be able to maintain their non-PFIC status by meeting the qualifying insurance corporation (QIC) test.

 It added that US shareholders will be significantly impacted by PFIC characterisation. Guidance is critical as early as possible to provide affected companies sufficient time to make structural and capital related decisions, if necessary, which may affect their QIC status.

 GFIA warned that, without further guidance, a non-US parented insurance group may not be able to determine if it is characterised as a PFIC for the current year, and its US shareholders would be the ones subject to US tax consequences, such as higher tax obligations and payment of estimated tax and penalties.

 It is important that non-US parented insurance groups can determine their QIC exemption status, so as to advise their shareholders of a possible PFIC classification. To make this assessment, insurance groups need clarification of the rules for qualifying as a QIC.

 GFIA also called for guidance on the following topics:
 • Clarifying that a US insurance company is a QIC.
 • Providing methods for electing an exemption tied to a facts and circumstances test.
 • Providing guidance on the scope of the alternative facts and circumstances test as provided in the new law.
  

Back to Index


Similar News to this Story

Inheritance Tax raises almost GBP6 billion in 8 months
December’s update from HMRC shows that Inheritance Tax (IHT) receipts reached £5.7 billion through the first two-thirds of this financial year (April
PIC completes first Mosaic buyin with GCB Pension Fund
Pension Insurance Corporation plc (“PIC”) has concluded its first full scheme buy-in within Mosaic, PIC’s streamlined service for pension schemes with
Airways Pension Scheme complete longevity hedge with MetLife
The Trustees of the Airways Pension Scheme (“the Scheme”), Metropolitan Tower Life Insurance Company, a subsidiary of MetLife, Inc., (“MetLife”) and Z

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.