v3.3.1.900

Taxation | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Taxation | Taxation Under current Bermuda law, Maiden Holdings and Maiden Bermuda, have received an undertaking from the Bermuda government exempting them from all local income, withholding and capital gains taxes until March 31, 2035. At the present time, no such taxes are levied in Bermuda. Maiden Holdings and Maiden Bermuda believe that they operate in a manner such that they will not be considered to be engaged in a trade or business in the U.S. Accordingly, Maiden Holdings and Maiden Bermuda have not recorded any provision for U.S. taxation. Our U.S. subsidiaries are subject to federal, state and local corporate income taxes and other taxes applicable to U.S. corporations. The provision for federal income taxes has been determined under the principles of the consolidated tax provisions of the U.S. Internal Revenue Code and Regulations. Should our U.S. subsidiaries pay a dividend outside the U.S. group, withholding taxes will apply. During 2015 the Internal Revenue Service completed its audit of our U.S. subsidiaries for tax years 2009, 2010 and 2011. The audit has been closed without any impact on our operations. Tax years 2012, 2013 and 2014 are not under examination but remain subject to examination in the U.S. The Company has subsidiary operations in various other locations around the world, including Australia, Austria, Germany, Ireland, Netherlands, Russia, Sweden and the U.K., that are subject to relevant taxes in those jurisdictions. These subsidiaries, are not under examination, but generally remain subject to examination in all applicable jurisdictions for tax years from 2011 through 2014. Deferred income taxes have not been accrued with respect to certain undistributed earnings of foreign subsidiaries as it is the intention that such earnings will remain reinvested or will not be taxable. If the earnings were to be distributed, as dividends or otherwise, such amounts may be subject to withholding tax in the country of the paying entity. Currently, however, no withholding taxes have been accrued. There were no unrecognized tax benefits at December 31, 2015, 2014 and 2013. Income before taxes and income tax expense for the years ended December 31, 2015, 2014 and 2013 was as follows:
For the Year Ended December 31, |  | 2015 |  | 2014 |  | 2013
Income before income taxes – Domestic (Bermuda) |  | $ | 134,012 |  |  | $ | 117,780 |  |  | $ | 125,926 |
Loss before income taxes – Foreign (U.S. and others) |  | (7,690 | ) |  | (14,083 | ) |  | (21,207 | )
Total income before income taxes |  | $ | 126,322 |  |  | $ | 103,697 |  |  | $ | 104,719 |
Current tax expense – Domestic (Bermuda) |  | $ | — |  |  | $ | — |  |  | $ | — |
Current tax expense – Foreign (U.S. and others) |  | 780 |  |  | 945 |  |  | 873 |
Total current tax expense |  | 780 |  |  | 945 |  |  | 873 |
Deferred tax expense – Domestic (Bermuda) |  | — |  |  | — |  |  | — |
Deferred tax expense – Foreign (U.S. and others) |  | 1,258 |  |  | 1,219 |  |  | 990 |
Total deferred tax expense |  | 1,258 |  |  | 1,219 |  |  | 990 |
Total income tax expense |  | $ | 2,038 |  |  | $ | 2,164 |  |  | $ | 1,863 |
15. Taxation The following table is a reconciliation of the actual income tax rate for the years ended December 31, 2015, 2014 and 2013 to the amount computed by applying the effective tax rate of 0.0% under Bermuda law to income before income taxes:
For the Year Ended December 31, |  | 2015 |  | 2014 |  | 2013
Income before income taxes |  | $ | 126,322 |  |  | $ | 103,697 |  |  | $ | 104,719 |
Income tax expense |  | 2,038 |  |  | 2,164 |  |  | 1,863 |
Net income |  | $ | 124,284 |  |  | $ | 101,533 |  |  | $ | 102,856 |
Reconciliation of effective tax rate (% of income before income taxes) |  |  |  |  |  |  |  |  |
Bermuda tax rate |  | — | % |  | — | % |  | — | %
U.S. taxes at statutory rates |  | (2.2 | )% |  | (7.3 | )% |  | (8.7 | )%
Valuation allowance in respect of U.S. taxes |  | 3.2 | % |  | 8.5 | % |  | 9.8 | %
Other jurisdictions |  | 0.6 | % |  | 0.9 | % |  | 0.7 | %
Actual tax rate |  | 1.6 | % |  | 2.1 | % |  | 1.8 | %
Deferred income taxes reflect the tax impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. The significant components of our deferred tax assets and liabilities at December 31, 2015 and 2014 were as follows:
December 31, |  | 2015 |  | 2014
Deferred tax assets: |  |  |  |
Net operating losses |  | $ | 60,147 |  |  | $ | 54,524 |
Unearned premiums |  | 9,459 |  |  | 8,860 |
Discounting of net loss and LAE reserves |  | 11,756 |  |  | 12,250 |
Net unrealized losses on investments |  | 4,374 |  |  | — |
Accruals not currently deductible |  | 109 |  |  | 1,994 |
Amortization of intangibles |  | 2,796 |  |  | 3,021 |
OTTI |  | 1,198 |  |  | 827 |
Others |  | 543 |  |  | 1,043 |
Deferred tax assets before valuation allowance |  | 90,382 |  |  | 82,519 |
Valuation allowance |  | 78,845 |  |  | 65,743 |
Deferred tax assets, net |  | 11,537 |  |  | 16,776 |
Deferred tax liabilities: |  |  |  |  |  |
Deferred commission and other acquisition expenses |  | 10,664 |  |  | 10,119 |
Indefinite lived intangible |  | 1,750 |  |  | 2,870 |
Amortization of goodwill |  | 8,319 |  |  | 7,158 |
Net unrealized gains on investment |  | — |  |  | 4,831 |
Others |  | 866 |  |  | 1,789 |
Deferred tax liabilities |  | 21,599 |  |  | 26,767 |
Net deferred tax liability |  | $ | 10,062 |  |  | $ | 9,991 |
The net deferred tax liability at December 31, 2015 was $10,062 (2014 - $9,991). A valuation allowance has been established against the net U.S. deferred tax assets which is primarily attributable to net operating losses, unearned premium and loss reserve discounting. At this time, we believe it is necessary to establish a valuation allowance against the net deferred tax assets due to insufficient positive evidence regarding the utilization of these losses. During 2015, the Company recorded an increase in the valuation allowance of $13,102 (2014 - decrease of $1,270). At December 31, 2015, the Company has an available U.S. net operating loss carry-forward of approximately $171,848 (2014 - $155,782) for income tax purposes which expires beginning in 2029.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 + Details
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