Treasury Releases Information on Corporate Alternative Minimum Tax

The U.S. Department of the Treasury (USDT) has published a press statement to announce that the Treasury itself and the Internal Revenue Service (IRS) have jointly drawn up guidelines addressed at insurance undertakings as regards the new minimum taxation of 15% of U.S. firms – the so-called Corporate Alternative Minimum Tax (CAMT) – under the Inflation Reduction Act. With this document, the regulators aim to guide insurers in their determination of gains and losses to be included under CAMT so as to prevent adverse effects on companies and their taxes due.
Specifically, the guidance, among other things, clarifies
– the definition of “adjusted financial statement income (AFSI)” that is to be used for determining the taxes due as regards CAMT;
– the treatment of dividends for purposes of the new tax;
– the determination of “adjusted financial statement income” for partners in a partnership;
– the accounting for variable contracts of insurance undertakings;
– the determination of the AFSI for fresh start companies (those that were previously tax-exempt); or
– the determination of the AFSI „with respect to Covered Reinsurance Agreements“.