Life insurance deals to be reported to Ministry of Finance

Insurance companies will have to submit to the Ministry of Finance (MoF) information about cash value life insurance contracts issued to persons whose tax residences are in countries that require such reports under the Common Reporting Standard (CRS), according to a circular issued by the Ministry of Economy’s Insurance Control Commission (ICC).

The CRS, which will be implemented starting from 2018, is the global standard for the automatic exchange of financial account information. It aims to fight tax evasion and avoidance.

Insurance companies must carry out due diligence work to identify holders of life insurance accounts that require reporting, the ICC said in the circular.

The report, called ‘information return’, should include the information required under CRS. It should be filed electronically with the MoF on a yearly basis. The first report to be issued next year will relate to calendar year 2017.

The information to be reported includes data such as the name, address, and tax identification number (TIN) of the holder of the life insurance. It also includes the cash value of the insurance, and the total gross amount paid or credited to the account holder.

The CSR was created by the Organization of Economic Cooperation and Development (OECD) upon the request of the group of the world’s twenty richest countries (G20).

The Lebanese parliament approved the tax information exchange law in 2015. Banks have already been instructed to abide by the CRS.