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U.S. District Court issues taxpayer-favorable opinion in <i>Validus Reinsurance, Ltd. v. United States</i>

20 February 2014

Tax Alert

On February 5, 2014, the U.S. District Court in Washington, D.C. issued the much anticipated opinion in Validus, holding that the so-called “cascading” federal excise tax (FET) of 1 percent of premiums paid in connection with reinsurance covering US risks does not apply to retrocession agreements between a non-U.S. reinsurer and a non-U.S. retrocessionaire. The court’s reasoning suggests that reinsurance agreements between a non-U.S. insurer and a non-U.S. reinsurer that cover U.S. risks are subject to the cascading FET, but the opinion does not specifically address this issue.

Read more: U.S. District Court issues taxpayer-favorable opinion in Validus Reinsurance, Ltd. v. United States


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