GREENLIGHT CAPITAL RE LTD
For the period ended Dec 31, 2023. Filed Mar 5, 2024.
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FY2023 · Filed Mar 5, 2024
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Income Taxes
- INCOME TAXES
Components of Income Taxes
The following table shows the breakdown of the Company’s current and deferred income tax benefit (expense) on a consolidated basis:
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Current tax (expense) benefit | |||
| Europe | $(587) | $(30) | $(10) |
| U.S. | (100) | 846 | (3,734) |
| Deferred tax (expense) benefit | |||
| Europe | (1,698) | (442) | (254) |
| U.S. | — | — | (2) |
| Decrease in deferred tax valuation allowance | 2,285 | 442 | 254 |
| Income tax (expense) benefit | $(100) | $816 | $(3,746) |
Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Act, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes a tax on profits, income, gains, or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to GLRE, Greenlight Re nor their respective operations, or to the ordinary shares or related obligations, before February 1, 2025.
Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the U.S. Internal Revenue Service (“IRS”). Verdant’s taxable income is generally expected to be taxed at a marginal rate of 21% (2022: 21%). Verdant’s tax years 2019 and beyond remain open and may be subject to examination by the IRS.
GRIL is incorporated in Ireland and therefore is subject to the Irish corporation tax rate of 12.5% on its trading income and 25% on its non-trading income.
Greenlight Re UK and GCM are incorporated in the United Kingdom and therefore are subject to the U.K. corporate tax rate of 25% (2022 and 2021: 19%) on their respective profits.
Deferred Tax Assets
The following table provides details of the significant components of deferred tax assets:
| December 31, 2023 | December 31, 2022 | |
|---|---|---|
| Deferred tax assets: | ||
| Operating and capital loss carryforwards | $1,087 | $2,785 |
| Deferred tax assets before valuation allowance | 1,087 | 2,785 |
| Valuation allowance | — | (2,285) |
| Deferred tax assets, net of valuation allowance | $1,087 | $500 |
At December 31, 2023, the Company has determined that it is more likely than not that it will fully realize the recorded deferred tax asset in the future based on the expected timing of the reversal of the temporary differences and the likelihood of generating sufficient taxable income to realize the future tax benefit.
Tax Loss Carryforwards
At December 31, 2023, GRIL had a net operating loss carryforward of $8.7 million (2022: $20.4 million) which can be carried forward indefinitely.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.