The CEA has reiterated its concerns about the disproportionate impact of the US Foreign Accounts Tax Compliance Act (FATCA) on European insurers who have a low number of US policyholders and whose products pose a low risk of tax evasion.
The CEA also highlighted the conflicts between the reporting requirement and EU Data Protection Directive and potential data availability issues which could leave European insurers unable to comply with
FATCA and thus subject to a 30 per cent withholding tax despite their best efforts.
The CEA's comments were made in its 27 June response to the consultation by the Inland Revenue Service (IRS) and the US Treasury on the draft implementing guidance on the documentation, reporting and withholding requirements for FATCA.
As the draft implementing guidance is mainly focused on banking, the
CEA stressed that it is essential that insurance specificities are taken into account in the application of
FATCA to life insurance. The
CEA welcomed the acknowledgement by the IRS that it still needs to consider insurance in detail in its deliberations. It also points out specific areas that need to be considered when making the
FATCA regime workable and more proportionate for the European insurance sector.
FATCA was passed by the US Congress last year and is intended to ensure that the US tax authorities obtain information on investments by US residents in foreign financial institutions.
Full position paper
© CEA - Comité Européen des Assurances
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article