The rate of change is accelerating in this digital age and presenting new tax risk management challenges across all industries, including insurance.
With the backdrop of requirements for greater controls and disclosures, insurance companies face increasing challenges to manage their global tax and reporting requirements. Some of the tax risks include: failing to comply with tax laws, transactions generating unintended tax consequences, inaccurate financial reporting and related disclosures, and tax authorities changing their approach with increased risks for multiple taxation of items from various jurisdictions. Furthermore, with increased regulatory requirements, insurance companies need to accurately model their taxes under a variety of scenarios.
In this chapter of the ‘Evolving Insurance Risk and Regulation’ publication, we consider the latest tax risks facing the industry in light of the recent reports published by the Organization for Economic Cooperation and Development’s (OECD) on Base Erosion and Profit Sharing (BEPS). Areas covered include:
1. permanent establishment considerations
2. transfer pricing
3. country-by-country reporting, and
controlled foreign company (CFC) risks such as overcapitalization, reinsurance assumed from a cedant outside the CFC’s jurisdiction, and related party insurance income.
This chapter is just one of a series on Evolving regulation. Click on the promo box below to read more.
Chapter 1: International developments dominate regulatory change
Chapter 2: Conduct Risk: Increasing regulatory focus to align product, customer and value
Chapter 3: Regional regulatory developments
Chapter 4: The impact of accounting changes on regulation
Chapter 5: Impacts of emerging risks on the global insurance industry
Chapter 6: Global tax risks bring increased challenges for the insurance industry