KPMG report: “Cascading” foreign insurance excise tax | KPMG | GLOBAL

KPMG report: Possible refund opportunities, “cascading” foreign insurance excise tax

KPMG report: “Cascading” foreign insurance excise tax

The IRS no longer imposes multiple levels of excise tax on certain foreign-to-foreign reinsurance transactions involving U.S. insureds. The IRS issued Rev. Rul. 2016-3 after a government loss in a decision by the U.S. Court of Appeals for the District of Columbia; the IRS conceded its “cascading” federal excise tax position. The revenue ruling revokes the position previously taken by the IRS in Rev. Rul. 2008-15 that had imposed multiple levels of federal excise tax on solely foreign-to-foreign reinsurance transactions when the direct insurance contracts involved U.S. insureds.


Related content

KPMG observation

Companies may want to reevaluate their tax positions with respect to the foreign insurance excise tax. It may be appropriate to stop paying the excise tax and consider filing claims for refund in certain circumstances.


Read February 2016 report [PDF 153 KB] prepared by KPMG LLP: What’s News in Tax: IRS Reversal of “Cascading” Foreign Insurance Excise Tax Ruling May Present Refund Opportunities

© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal