Nederlands vs Corp, July 2011, District Court of Hague, Case No AWB 08/9105, LJN BR4966

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X is the holding company of the so-called A-group, which is active in the recreation business. The activities in X was taking out cancellation insurance. Within the group an Irish re-insurance company was established. Several contracts were concluded between X and the Irish company with regard to the insurance activities. The court considered that the tax administration had proved that X transferred profits to the Irish company.

The internal reinsurer generally does not perform the underwriting function, does not diversify risk itself and does not have the required expertise and experience in relation to the insurance activity and investment of the premiums received. Therefore, transactions between the internal reinsurer and the group entity pursuing the main business of the group will not qualify as insurance transactions. The reinsurance entity performs only a limited administrative function that justifies only limited remuneration.

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