WASHINGTON, D.C. (December 8, 2017) – The Coalition for American Insurance is urging members of the Conference Committee on the Tax Cuts and Jobs Act to maintain language included in the Senate passed version of the bill that takes significant steps to close the Insurance Tax Haven Loophole. In a letter to conferees, the Coalition said the language is necessary to establish a level playing field between U.S. and foreign based insures operating in the U.S. The letter reads in part:
“The Base Erosion and Anti-Abuse Tax (BEAT) established in the Senate-passed bill will combat base erosion and prevent U.S. generated profits from being shifted overseas. This is of particular importance in the insurance industry. Under current law, foreign-based insurers are able to strip their profits from U.S. generated business to affiliates located in low or no tax jurisdictions like Bermuda. If nothing is changed, this loophole will cost the U.S. taxpayer nearly $9 billion over the next decade and continue to give foreign-based insurers a significant competitive advantage over U.S. companies.
“It is important to note that the BEAT language included in the Senate bill would not penalize foreign-based companies. Instead, they would have the option to be treated like U.S. based companies or pay the BEAT tax, bringing their total tax payment in line with what is already being paid by U.S. based insurers.
“Our nation’s tax code should not incentivize the inversion of U.S. based companies or the offshoring of U.S. generated profits. The inclusion of the BEAT in the Tax Cuts and Jobs Act will ensure that these incentives are at the very least reduced and all insurers and businesses will pay taxes on profits earned here in the U.S.”
To read the full letter please click HERE.
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.