Rev. Proc. 2003-78, 2003-2 C.B 1029, contains instructions for the introduction of an excise duty exemption under Section 4371 on insurance premiums paid to a foreign insurer or reinsurer if the exemption is based on the provisions of an income tax agreement in which the United States participates. The instrument for acquiring the exemption is provided by an agreement between the foreign insurance company and the Commissioner of the Internal Revenue Service (IRS). Please send the corresponding form closure agreement, Appendix A PDF (convention for qualified exception agreements, PDF) or Appendix B PDF (convention for agreements with line limitation, PDF) from Rev. Proc. 2015-46, triple version, with an original signature. Foreign insurers or reinsurers who wish to enter into an agreement under the above performance procedures can be found on the DuFederal Excise Tax Exemption Program. In its latest guide – a memorandum – the IRS stated that excise controllers should collect detailed information and pass it on to the International Excise Tax Group when an auditor meets with a FCIC.
Information to be collected from the examiner includes the name, employer identification number and home of the subsidiary. In addition, the auditor must indicate the amount of premiums insured with the subsidiary and the amount of premiums reinsured by the subsidiary from reinsurance companies. Finally, the examiner must indicate whether the branch in captivity has conducted an election under Section 953 (d) and whether the FCIC has entered into a conclusion agreement. The feT is liable for any person “who makes, signs, issues or sells documents and instruments subject to the tax or who is made, signed, issued or sold for the use or usefulness of this tax.” The FET must be paid by the person who pays the premium to a foreign insurer or who insures. If the tax is not paid by the person paying the premium, the tax must be paid by the person submitted to one of the FETs, signed, issued or sold.