What is the tax treatment for alien premium (risks located in a foreign country) received by a Delaware domiciled company?
If a Delaware domestic insurer writes premium in a state or province of Canada – or any foreign country – to which no premium tax is paid on that premium, the insurer is required to include that premium in its Delaware taxable premium. This would still hold true if the premium is considered tax exempt in that country, unless the premium would be similarly tax exempt in the United States. In that case, the company should ask for tax exemption by contacting the Delaware Insurance Department in writing. The company should include any documents substantiating its claim for tax exemption with its request.
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