Tax & Legal

In a recent judgment, the Supreme Tax Court decided, inter alia, that interest on deposit liabilities in the retrocession business of a reinsurance company is subject to the trade tax addback pursuant to Section 8 no. 1 letter a Trade Tax Act. There is no general exception for insurance and reinsurance companies similar to the so-called trade tax banking privilege.

The Supreme Tax Court has accepted as legitimate an arrangement under which an independent insurance company offers a group subsidiary cover against a 100% reinsurance with a group captive.