Taxes and Fees in Delaware for Captive Insurance Companies
There are two different types of fees for Delaware captive insurance companies. The first is a one-time application fee of $200 and an application processing fee of $3,000. Both of these fees are due upon the submission of the application to the Delaware Commissioner of Insurance. The second type is an annual license renewal fee of $300 which is due annually on March 1st along with the filing of the annual Premium Tax and Fees Report.
A captive insurance company does not pay income taxes in the State of Delaware. They do, however, pay premium taxes, which are due annually on March 1st along with the filing of the Annual Premium Tax and Fees Report. Premium taxes are calculated on gross written premiums during the calendar year less any dividends returned to policyholders. The direct premium tax is based on 2/10 of 1% and the assumed reinsurance premium tax is based on 1/10 of 1% of the total taxable premiums. The minimum annual premium tax is $5,000 and the maximum is $200,000 per captive insurance company.
In addition to the taxes and fees noted here, all Delaware corporations must file an annual Franchise Tax Report. For captive insurance companies, there is no franchise tax due, but there is a $50 filing fee for the filing of the annual Franchise Tax Report.
For more information concerning the calculation of the premium tax or regarding the filing of any of the reports noted here, you can visit the State of Delaware’s Captive Insurance home page (http://captive.delawareinsurance.gov) or you can contact Jan Snow at jsnow@www.coverrossiter.com.