Retrocessions Subject To Double Taxation, IRS Tells Judge

Law360, New York (November 25, 2013, 2:56 PM EST) -- An excise tax on foreign-to-foreign reinsurance premiums is a perfectly legal form of double taxation, the IRS told a District of Columbia federal court on Friday.

The Internal Revenue Code imposes a 1 percent excise tax on reinsurance policies that cover direct U.S. policies, but since 2008, the IRS has also been imposing the tax on retrocessions — reinsurance premiums paid to insure other reinsurance policies.

“The excise tax under section 4371(3) clearly applies to retrocessions, it can be imposed more than once, the actions of...
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Case Information

Case Title

VALIDUS REINSURANCE, LTD. v. UNITED STATES OF AMERICA


Case Number

1:13-cv-00109

Court

District Of Columbia

Nature of Suit

Taxes

Judge

Amy Berman Jackson

Date Filed

January 24, 2013

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