Company: FRFXF
Filing Date: 2025-03-14
Form Type: F-4
Source: 0001104659-25-024010
Chunk: 38

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-14
Form: F-4
Chunk 38
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 or considering the implementation of, new domestic
tax regimes, or are planning to revise existing tax regimes, in response to the global Pillar Two tax initiative.

Further, on December 27,
2023, Bermuda enacted the CIT Act. Entities subject to tax under the CIT Act are the Bermuda constituent entities of multi-national groups.
A multi-national group is defined under the CIT Act as a group with entities in more than one jurisdiction with consolidated revenues
of at least EUR750 million for two of the four previous fiscal years. If Bermuda constituent entities of a multi-national group are subject
to tax under the CIT Act, such tax is charged at a rate of 15% of the net taxable income of such constituent entities as determined in
accordance with and subject to the adjustments set out in the CIT Act. Tax is chargeable under the CIT Act for tax years starting on or
after January 1, 2025. In addition, the CIT Act includes transition rules, including carryforward tax losses incurred in the five fiscal
years preceding the effective date or increases in the tax basis of assets and liabilities. The CIT Act also provides relief from double
taxation via foreign tax credit based on the adjusted amount of foreign taxes accrued by the group. The CIT Act is designed as a covered
tax for the purposes of the OECD’s Global Base Anti-Erosion Rules (“GloBE Model Rules”), meaning the CIT Act
does not presently apply an income-inclusion rule or under taxed profits rule in the same way as the GloBE Model Rules do. While we expect
that Allied World would be treated as a Bermuda constituent entity for the purposes of the CIT Act and therefore subject to taxation in
Bermuda, we do not currently expect the CIT Act to have a material adverse effect on our results of operations going forward. Future developments
and guidance under the GloBE Model Rules may impact Bermuda’s implementation of its corporate tax regime, and any future changes
to the Bermuda corporate income tax regime may impact our tax liability, financial condition and results of operations, and could increase
our administrative expenses. This is generally expected to result in an increase in the Company’s liability for taxes in Bermuda
and to reduce any Pillar Two top-up taxes payable by the Company in respect of Bermuda.

The Company is also subject
to the application of the Canadian excessive interest and finance expense limitation rules (enacted on June 20, 2024) that limit the deductibility
of certain interest expenses in certain circumstances, which may result in