Insurer Seeks End to Foreign Reinsurance Excise Taxes

Law360, New York (October 31, 2013, 3:57 PM EDT) -- The Internal Revenue Service's enforcement of a 1 percent excise tax on certain foreign-to-foreign reinsurance premiums violates congressional intent, Bermuda-based insurance company Validus Reinsurance Ltd. told the District of Columbia federal court Thursday.

In its latest motion for summary judgment in its suit against the government, Validus contends that the IRS imposes an illegal double tax by taxing "retrocessions,” which are reinsurance premiums paid to insure other reinsurance policies. The Bermuda company also argued that the U.S. excise tax should never be charged on foreign-to-foreign retrocessions because these...
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