Our dedicated team assists US and non-US multinational insurance companies in navigating legislative changes and the current financial environment. Drawing on our global network of over 50 insurance partners operating in all worldwide regions, we provide comprehensive cross-border solutions. Our extensive experience includes traditional topical areas as global structural and profit alignment, cross-border mergers and acquisitions, worldwide treasury management and cash deployment and financing, and tax attribute employment. We also assist companies in managing their US tax nexus risk, transfer pricing and IRS controversy assistance.
Prudent financial risk management is a critical element of an insurance company’s success. Our financial services professionals are dedicated to navigating the rules governing the tax treatment of the wide variety of financial products that are employed by insurance companies. Corporate treasury departments devote significant resources to developing transactions that hedge the risk of adverse fluctuations in currency exchange rates, interest rates, and equity prices and taxes are often overlooked when benchmarking the success of a treasury function’s hedging activities. Poorly structured hedging and other transactions can give rise to income or expenses for tax purposes that cannot be offset against taxable income or expense arising from the transaction being hedged. The resulting timing, character and source whipsaws are frequently of a magnitude that is disproportionately large when compared to the amount of actual net economic income or loss arising from the combined transactions. Our team works with treasury departments to reduce the conflicts between their non-tax objectives and the underlying maze of tax rules.
A key priority for insurance companies is reputation risk, and at present worldwide tax nexus risks are drawing scrutiny from all corners of the globe. Equally important to insurance companies is the return on their funds’ investments. Tax costs can have a material adverse effect on the return on investment but are frequently overlooked by non-tax investment managers. Our global team maintains constant review of all evolving worldwide investment tax positions regarding liquid and illiquid equity, debt, commodities, derivatives and other investment vehicles and helps insurance companies to manage their funds’ tax costs.