Jul 21, 2010

"The German government has come out opposing legislation by Rep. Richard Neal (D-Mass.) that limits tax deductions for reinsurers that transfer large portions of premiums paid in the U.S. offshore.

'It goes without saying that the German Government recognizes the U.S. Government's right to combat tax avoidance and evasion,' wrote German Ambassador Klaus Scharioth. 'But it is our view that the proposed legislation goes well beyond this objective and, as a result, will be in conflict with provisions of the German-U.S. tax treaty.'

Neal has argued an increasing amount of U.S. premiums have migrated offshore simply to avoid taxation. His bill attempts to limit this activity by denying the deduction if premiums that are moved offshore exceed a certain amount."

Click to go to The Hill website and read the entire article.