Foreign Insurance Excise Tax: IRC 4371

A premium wired to an insurer outside the United States can trigger a federal excise tax that your domestic insurance bills never did. The foreign insurance excise tax, the tax most people look up as IRC 4371, is charged per dollar of premium. It goes on Form 720 as IRS No. 30, and the person sending the premium abroad is normally the one who pays it.

The rate depends on the type of policy, and the timing depends on when the money moves. Here is how each piece works.

What are the foreign insurance excise tax rates?

Form 720 lists three types of policy. Each rate applies to the premium paid to the foreign insurer.

Publication 510 applies each rate to "each dollar (or fraction thereof)" of premium. So part of a dollar counts as a whole dollar. Its own example: a $10.10 premium is treated as 11 dollars, so the tax is $0.44 at $.04 and $0.11 at $.01.

Premium here is wider than the headline price. It means the agreed price for carrying the risk, including any additional charge or assessment under the contract, whether paid in one sum or in installments.

Which premiums fall outside the tax?

• Export goods in transit. The tax doesn't apply to casualty insurance premiums paid to foreign insurers for coverage of export goods in transit to foreign destinations.
• Certain foreign-to-foreign reinsurance. The 1% tax doesn't apply to reinsurance issued by one foreign reinsurer to another foreign insurer or reinsurer, in the situations described in Rev. Rul. 2008-15. The instructions point to Rev. Rul. 2016-03 on this.
• Premiums exempt under a treaty. See the disclosure rules below. A treaty position has its own reporting duty, so it isn't simply a matter of leaving the premium off.

Who has to pay the tax and file the return?

The instructions set an order of responsibility:

1. The person who pays the premium to the foreign insurer, or to any nonresident person such as a foreign broker, must pay the tax and file the return.
2. Otherwise, any person who issued or sold the policy, or who is insured under it, is required to pay the tax and file.

This matters when a broker sits between you and the insurer. Suppose you pay a U.S. broker and the broker sends the premium abroad. The broker is then the person paying the foreign insurer, so it comes first in line. You are still the insured, though, so get written confirmation of who is handling the tax.

When does the liability attach?

Liability attaches when the premium payment is transferred. It doesn't depend on the policy date or the invoice date. Publication 510 lists the recipients that count:

• The foreign insurer or reinsurer.
• Any bank, trust fund, or similar recipient the foreign insurer or reinsurer designates.
• Any nonresident agent, solicitor, or broker.

So the first remittance to a foreign broker can create the tax, even if the broker hasn't yet passed the money to the insurer. A wire to a bank account the insurer named counts too. The Form 720 line follows the same idea, because you enter the premiums paid during the quarter.

A worked example with deposit timing

The company and figures here are made up. Northfield Parts, a U.S. manufacturer, sends these whole-dollar premiums directly to foreign insurers on October 20, 2026:

IRS No. 30 is a Part I tax, and Northfield's net Part I liability is over $2,500 for the quarter, so semimonthly deposits are required. A smaller liability of $2,500 or less for the quarter could be paid with the return instead.

October 20 falls in the October 16 to 31 period. A deposit is due by the 14th day after the period ends. November 14, 2026 is a Saturday, and the rule moves a weekend deposit date back, so the deposit is due Friday, November 13. It must be at least 95% of the net liability for the period, or $10,260, unless the safe harbor rule applies.

On Schedule A, the $10,800 goes in box B, the second half of the first month. The return for October through December is due Monday, February 1, 2027, because January 31, 2027 is a Sunday. See the Form 720 due dates for the other quarters.

Treaty positions and the records you need

A foreign insurer or reinsurer that takes the position that a U.S. treaty overrides or modifies the tax must disclose it once a year. The statement reports the premiums exempt from this tax for the previous calendar year, and it is filed with the first-quarter Form 720, due before May 1. Form 8833 may serve as the statement.

The instructions add specific steps:

1. Enter "Section 6114 Treaty" at the top of Form 720.
2. If you have nothing else to report, enter "None" on lines 1 and 3 and sign the return. Check the "Final" box if it is your final return.
3. Mail Form 720 with the Form 8833 or statement to the Where To File address. The instructions say all filers should mail this.

For the tax itself, Publication 510 requires records that identify each policy and show the type of policy, the gross premium paid, the insured and insurer, and the total premium charged. For installments, also record the amount and anniversary date of each one. Keep these records for at least 3 years after the later of the date any part of the tax became due or was paid.

Reporting IRS No. 30 online

Gather the premiums paid during the quarter, split by the three policy types, along with the date each payment went out. EasyFile720 walks you through filing Form 720 online from business details to submission. You enter your premium figures, and the built-in rates do the math for IRS No. 30. Schedule A is included for your semimonthly amounts, and validations catch common mistakes before you submit.

An account is free to create, with no credit card needed to start. You pay when you file, at $39.95 per filing, or see pricing for the Full Year Plan if you expect to report in all four quarters. Once the IRS accepts the return, you receive an electronic acknowledgment.

FAQ

Sources: Instructions for Form 720 (Rev. June 2026); Form 720 (Rev. June 2026); IRS Publication 510 (Rev. December 2025). General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.