Unit_8_Partnership_and_other_cases

23ais nethkpremiumsseenextslide

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Unformatted text preview: of reported period [s.23(3)] Once elected alternate method; irrevocable and apply to future years also [s.23(7)] Business carried on both in & outside HK, Unit 8 ­ Insurance Company Unit Assessable Profit of HK Non­life insurance corporations under s.23A is Net HK Premiums (# See next slide) + Interest or other income arising in HK (* See below) + Balancing charges ­ Actual losses (reduced by recoveries from re­insurance) ­ Agency expenses ­ Share of Head Office expenses ­ Depreciation Allowances ­ Increase in reserve for unexpired risks [*CIR v Carlingford Life and General Assurance Co. Ltd (1990) – interest income of an insurance company with no HK income exempted] Unit 8 ­ Insurance Company Unit # Net HK Premium = Gross HK Premium ­ Premiums returned to customers [rebates 回回 ] ­ Premiums for re­insurance [for spreading the risk to other insurance companies] HK Premiums are those non­life contracts made in HK or proposals made to corporations in HK [s.23A(3)] Unit 8 ­ Insurance Company Unit Assessable Profits of HK re­insurers of offshore risks = B/C x D B: Assessable Profit for the period per s.23A(1) C: Total income during the period D: Offshore re­insurance income during the period [Professional re­insurer is a person only authorized to carry on re­insurance business in HK under s.8 of Insurance Companies Ordinance. Though the income comes from overseas, the company bears the risk in HK for earning the income → taxable in HK] Unit 8 ­ Insurance Company Unit Assessment of Non­resident insurance corporations → CIR’s discretion using alternate method CIR’s discretion using alternate method under s. 23A(1) → by reference to proportion of HK premiums to worldwide premiums Unit 8 ­ Insurance Company Unit Mutual insurance corporations are assessed under s.23AA [assessment is same as provisions in s.23 & s. 23A] Mutual insurance corporation is accepting insurance policies from its members. Profits generated within same group of persons and distributed back to them. [Note: without s.23AA, they will be exempted under s.24] Unit 8 ­ Shipping Company Unit Ship­owners deemed to have business in HK (s.23B) if Business controlled & managed in HK [s.23B(1)(a)] Incorporated in HK [s.23B(1)(b)] Ships owned called at HK waters [s.23B(2)] CIR’s discretion [s.23B(6)] (* Exception ­ see below) (*Note: casual call...
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This document was uploaded on 03/18/2014.

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