Rev. Proc. 2024-20: Foreign insurance companies; effectively connected net investment income (2023)
IRS provides domestic asset / liability percentages and domestic investment yields needed by foreign life insurance companies
Foreign insurance companies; effectively connected net investment income
The IRS today released Rev. Proc. 2024-20 that provides the domestic asset / liability percentages and domestic investment yields needed by foreign life insurance companies and by foreign property and liability insurance companies to compute their minimum effectively connected net investment income under section 842(b) for tax years beginning after December 31, 2022.
Domestic asset / liability percentages for 2023 (first tax year beginning after December 31, 2022) |
|
123.2% |
For foreign insurance companies under Part I of subchapter L |
207.3% |
For foreign insurance companies under Part II of subchapter L |
Domestic investment yields for 2023 (first tax year beginning after December 31, 2022) |
|
2.3% |
For foreign insurance companies under Part I of subchapter L |
2.7% |
For foreign insurance companies under Part II of subchapter L |
To compute estimated tax and the installment payments of estimated tax, a foreign insurance company must compute its estimated tax payments by adding to its income (other than net investment income) the greater of:
- Its net investment income as determined under section 842(b)(5), that is actually effectively connected with the conduct of a trade or business within the United States for the relevant period, or
- The minimum effectively connected net investment income under section 842(b) that would result from using the most recently available domestic asset/liability percentage and domestic investment yield.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained 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 3712, 1801 K Street NW, Washington, DC 20006.