WASHINGTON, D.C. (December 2, 2017) – The Coalition for American Insurance applauds Senate approval of tax reform legislation. The Senate passed version of the Tax Cuts and Jobs Act takes significant steps to close the Insurance Tax Haven Loophole and thereby will ensure that foreign-based insurers can no longer offshore U.S.-generated profits to avoid U.S. taxes.
“We are very pleased the Senate passed bill will help establish a fairer playing field and tax treatment for all insurers operating in the U.S. The Insurance Tax Haven loophole has cost the U.S. taxpayers billions of dollars and given foreign-based insurers doing business here a significant competitive advantage over those still based in the U.S. for far too long. The bill approved by the Senate today takes important and necessary steps toward eliminating this loophole.
“This is a common sense change. Companies doing business in the U.S. should pay taxes here. Under the Senate-passed bill, foreign based companies are not penalized. On the contrary, they could either be taxed similar to U.S. based companies or pay a base erosion alternate tax. While this option still allows foreign insurers a slightly more favorable tax treatment than U.S. based insurers, it essentially closes the Insurance Tax Haven Loophole in current law. U.S. insurers will continue to be subject to the full U.S. tax liability.
“As the tax reform process moves to the conference committee stage, it is essential that policy makers adhere to the Senate approach on closing the loophole and ending incentives for companies to shift jobs and revenue overseas. Our nation’s tax code should not subsidize foreign-headquartered companies, particularly those that were once based here but inverted for a tax advantage.”
ABOUT THE COALITION –
The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes.