On 25 March 2014, the Government of the Hong Kong Special Administrative Region (Hong Kong) signed an agreement with the Government of the United States of America (US) relating to the exchange of information relating to taxes. This is the first TIEA signed by Hong Kong.
Tax Related Developments
Internal Revenue Service Files Appeal in the Validus Excise Tax Case
Following up on our earlier Insurance and Reinsurance Blog on this matter (the relevant post can be found here), the Internal Revenue Service today filed an appeal to the United States Court of Appeals for the District of Columbia Circuit of the recent United States District Court decision in the Validus case (holding that the excise tax imposed on the foreign insurance/reinsurance of U.S. risks by Section 4371 of the Internal Revenue Code does not apply to retrocession policies). …
Validus District Court Decision: Retrocessions Not Taxable as Reinsurance Under Section 4371 of the Code
As previously discussed in our Insurance and Reinsurance Blog (the relevant post can be found here), the United States District Court for the District of Columbia recently ruled that the excise tax imposed on the foreign insurance/reinsurance of U.S. risks by Section 4371 of the Internal Revenue Code does not apply to retrocessions. Validus, a Bermuda reinsurer, filed the refund suit in this case with respect to excise taxes it had paid on nine retrocession policies. …
Potential New York Legislation to Introduce Tax Changes With Respect To Captive Insurers
Earlier in 2014, Governor Andrew Cuomo introduced a series of tax reforms in his budget bill (the “Bill”) which is currently being addressed by the state legislature. …
Validus Wins Round One: Retrocessions Not Taxable Under 26 USC § 4371(3)
By Troutman Pepper Locke on
A federal district court in Washington handed Validus Reinsurance a major win on Wednesday, declaring that the IRS has no authority to assess excise tax on retrocessions. The decision in Validus Reinsurance, Ltd. v. United States of America, No. 13-0109 (D.D.C. Feb. 5, 2014), is available here. …
Does NRRA Capture Captives?
Continuing the controversy first discussed in our earlier article (a copy of which can be accessed here), uncertainty remains over whether the self-procurement tax and regulatory provisions of the Non-admitted and Reinsurance Reform Act, enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, apply to non-admitted insurance procured from a captive insurance company. …
House and Senate Introduce Bills Deferring Tax Deductions for Foreign Insurers
Legislation was introduced this week to prevent foreign-controlled insurers operating in the United States from reducing their U.S. tax bill by reinsuring with their non-U.S. affiliates.…
Connecticut Governor Announces Plans To Build Captive Insurance Market
By Troutman Pepper Locke on
Connecticut Governor Dannel P. Malloy has recently put forth proposals in an effort to make Connecticut an enticing domicile for captive insurance companies. According to media reports, Governor Malloy has asked the legislature to approve a $7,500 first-year tax credit for new captive insurers. …
Obama’s 2013 Budget Proposes Tax on Excess Reinsurance Premiums to Offshore Affiliates Again
President Obama’s recently released Budget of the U.S. Government for the Fiscal Year 2013 (the “Proposed 2013 Budget”) would disallow the current deduction for non-taxed reinsurance premiums paid to foreign-affiliates by U.S. insurance companies. …
The House and Senate Introduce Bills Deferring Tax Deductions for Foreign Reinsurers
Earlier this month, the U.S. House and U.S. Senate introduced legislation that would defer tax deductions for insurers that cede large portions of their U.S. premiums to offshore affiliates. …