Company: AXS-PE
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001214816-25-000056
Chunk: 262

Company: AXIS CAPITAL HOLDINGS LTD
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 262
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s are intended to provide jurisdictions with the right to charge top-up taxes on entities located in that jurisdiction if those entities have an effective tax rate of less than 15%. A number of jurisdictions in which we operate have implemented the Model Rules into domestic legislation, including the implementation of QDMTTs, with effect for accounting periods starting on or after 31 December 2023. 

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Although domestic legislation implemented to affect the Model Rules is not expected to have a material effect on our global effective tax rate in the current accounting period, these taxes remain subject to a multilateral review process which is subject to ongoing development and the interpretation of these rules by tax authorities remains uncertain. The responses to Pillar 2 by various jurisdictions in which we operate (including the interpretation of domestic legislation by local tax authorities) will result in a material compliance burden with ongoing monitoring and filing requirements.

We will be liable to tax under the Corporate Income Tax Act 2023 of Bermuda, which may have an adverse effect on our results of operations.

The Bermuda Minister of Finance, under the Exempted Undertakings Tax Protection Act 1966 of Bermuda, as amended, has given each of our Bermuda resident companies an assurance that if any legislation is enacted in Bermuda that would impose tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax will not be applicable to our Bermuda resident companies or any of their respective operations, shares, debentures or other obligations until March 31, 2035.

Notwithstanding the above, on December 27, 2023, the Bermuda government enacted a corporate income tax which will apply for accounting periods starting on or after January 1, 2025. Importantly, under the Corporate Income Tax Act 2023 of Bermuda, any liability to the tax will apply regardless of any assurances previously provided under the Exempted Undertakings Tax Protection Act 1966 of Bermuda. This tax will likely have a material impact on our effective tax rate in future accounting periods.

Broadly, the Bermuda corporate income tax is intended to be treated as a covered tax for the purposes of Pillar Two and therefore no double taxation is expected to arise from these rules and the top-up taxes under Pillar Two in other jurisdictions. However, the treatment of the Bermuda corporate income tax as a covered tax is subject to interpretation in other jurisdictions and therefore remains uncertain at this time. The OECD published administrative guidance on January