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)
Share of Head Office expenses
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.
- Spring '14