(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
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KD-3789
Today the Treasury Department and the Internal Revenue Service issued guidance on a question relating to how a foreign life insurance company with U.S. operations determines the income that is subject to U.S. tax. Foreign companies with U.S. operations are subject to U.S. tax on the income attributable to their U.S. operations (their effectively connected income).
Life insurance companies generally are required to file annual statements with state insurance regulators. The revenue ruling provides that the treatment of assets on these statements will not determine if the assets are to be considered connected with the foreign insurance company's U.S. business activities for U.S. tax purposes, but this treatment will be given due regard. Due regard will also be given to the treatment of the assets on the books and records of the insurance company's U.S. trade or business.
This guidance addresses an important question for foreign companies with U.S. life insurance businesses.
The text of Revenue Ruling 2003-17 is attached.
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