How to file Form BIRS11 for qualifying ship lessors in Hong Kong
Instructions for Form BIRS11, Hong Kong's tax concession form for qualifying ship lessors, including eligibility and filing steps.
BIRS11 at a glance
- Official title
- Qualifying ship lessor
- Issued by
- Inland Revenue Department
We link the issuing authority's own index rather than hosting a copy, because the form is revised there and an out-of-date copy is worse than none.
Form BIRS11 Qualifying Ship Lessor Hong Kong
Form BIRS11 is the specified form for a qualifying ship lessor to apply for the tax concession under the Inland Revenue Ordinance (Cap. 112). The concession provides a reduced profits tax rate on eligible income from qualifying ship leasing activities in Hong Kong. The eligibility criteria, the scope of the concession, and the steps for completing and filing Form BIRS11 with the Inland Revenue Department (IRD) are detailed below.
BIRS11 Form Instructions
File Form BIRS11 with the relevant profits tax return (BIR51 for corporations or BIR52 for other persons) for the year of assessment in which the concession is claimed. The form requires particulars of the ship leasing business, including each qualifying ship lease agreement, the lessee, the lease period, and the income derived.
Electronic filing of Form BIRS11 is through the Business Tax Portal. Taxpayers required to file electronically must submit the form in iXBRL format, with financial statements and the tax computation tagged accordingly. Paper filing remains available for those not subject to mandatory electronic filing, though the IRD intends to achieve full electronic filing by 2030.
Attach a certified true copy of each ship lease agreement. You must also provide a schedule showing the calculation of eligible income and the amount of concession claimed. The IRD may request additional supporting documents, such as evidence of the ship's registration and the lessor's qualifying status.
Ship Lessor Tax Concession Hong Kong
The tax concession for a qualifying ship lessor is provided under section 14J of the Inland Revenue Ordinance (Cap. 112). It applies to profits from qualifying ship leasing activities, taxed at a reduced rate of 8.25%, half the standard profits tax rate for corporations. The standard rate is 16.5%.
Eligible income includes charter hire, lease payments, and other income directly attributable to leasing qualifying ships. The concession does not apply to income from non-qualifying ship leasing activities, such as leasing to connected persons on non-arm's length terms or leasing ships that fail to meet the qualifying criteria.
This concession promotes Hong Kong as a centre for ship leasing and maritime finance. It aligns with government policy to develop the maritime services sector and attract international ship leasing businesses.
Hong Kong Qualifying Ship Lessor
To qualify as a ship lessor under Cap. 112, a taxpayer must meet these conditions. The taxpayer must be a corporation (or a partnership where all partners are corporations) carrying on a ship leasing business in Hong Kong. The ship must be a qualifying ship: a sea-going vessel over 500 gross tons registered in Hong Kong or an IRD-approved jurisdiction. It must be used for international transport of goods or passengers, or for offshore oil or gas exploration and exploitation. The lease must be a qualifying lease, a bareboat charter, time charter, or voyage charter, and the lessee cannot be a connected person of the lessor. The lessor must have a substantive business presence in Hong Kong, including a fixed place of business, employees, and management in Hong Kong.
The IRD may require proof that the ship leasing activities are carried out in Hong Kong and that the lessor has the necessary substance. Failure to meet these conditions results in denial of the concession and the application of the standard profits tax rate.
Form BIRS11 Filing Guide
Follow these steps to complete and file Form BIRS11. Obtain the form from the IRD's forms index or the Business Tax Portal. Provide the taxpayer's name, business registration number, tax file number, and the year of assessment. List each qualifying ship lease agreement, including the ship's name, IMO number, registration details, lessee name, lease period, and income derived. Attach supporting documents: a certified true copy of each ship lease agreement, a schedule of eligible income and tax computation, and evidence of the ship's qualifying status, such as a certificate of registry or tonnage certificate. Calculate the concession. Compute the eligible income and the concession amount. The reduced rate of 8.25% applies to eligible income; the tax computation must show the standard rate and the concession amount. File the form with the profits tax return (BIR51 or BIR52) through the Business Tax Portal for electronic filing or by post for paper filing. The deadline matches the profits tax return deadline, generally one month from the return's issue date, unless an extension is granted. Retain records. Keep copies of the filed form, supporting documents, and tax computation for at least seven years. The IRD may review or audit the claim.
Assessment Year and Tax Computation
The concession is claimed for a specific year of assessment. The taxpayer must include eligible income in the profits tax return for that year and compute the tax at the reduced rate. The tax computation must separate eligible from non-eligible income, as the standard rate applies to the latter.
The IRD assesses the concession based on Form BIRS11 and its supporting documents. If satisfied, it issues a notice of assessment reflecting the reduced rate. If the IRD disputes the claim, it may request more information or issue an assessment at the standard rate, which can be objected to and appealed.
Electronic Filing and IXBRL
From the year of assessment 2025-26, mandatory electronic filing of profits tax returns applies to relevant entities of in-scope multinational enterprise groups. These taxpayers must file Form BIRS11 electronically through the Business Tax Portal, with financial statements and the tax computation tagged in iXBRL format.
Taxpayers not subject to mandatory filing may still file electronically. The IRD encourages this for faster processing and reduced paper handling. The Business Tax Portal offers a step-by-step guide for electronic submission.
Penalties for Incorrect Claims
A taxpayer making an incorrect claim on Form BIRS11 faces penalties under the Inland Revenue Ordinance (Cap. 112). This includes understatement of income, overstatement of eligible income, or failure to provide accurate particulars. The IRD will also recover any underpaid tax plus interest.
To avoid penalties, ensure all information on Form BIRS11 is accurate and complete, and that supporting documents are genuine and correctly certified. For complex ship leasing arrangements, seek professional advice from a tax adviser or accountant.
How to fill out Form BIRS11
Page one of the official form. Every field named below appears on it in the same order.
Section A - Particulars of the qualifying ship lessor
Box 1 - Name of qualifying ship lessor
Enter the full legal name of the company that is the qualifying ship lessor. This should match the name on the Certificate of Incorporation.
Box 2 - Business Registration Number
Enter the 8-digit Business Registration number. This is found on the Business Registration Certificate issued by the Inland Revenue Department.
Box 3 - Address of registered office
Give the company’s registered office address as shown on the Companies Registry record.
Box 4 - Address of principal place of business in Hong Kong (if different from Box 3)
If the company operates from a different location than the registered office, enter that address here.
Box 5 - Date of commencement of qualifying ship leasing activity
Enter the date (dd/mm/yyyy) on which the company first began its qualifying ship leasing business. This date must be consistent with the company’s own records and any supporting documents.
Box 6 - Year of assessment
State the year of assessment for which this form is being filed (e.g., 2024/25).
Section B - Qualifying ship leasing income
Box 7 - Total amount of qualifying ship leasing income
Enter the total income derived from qualifying ship leasing activities during the relevant period. This figure should be computed in accordance with the Inland Revenue Ordinance provisions for qualifying ship lessors.
Box 8 - Amount of qualifying ship leasing income attributable to Hong Kong
Enter the portion of the income in Box 7 that is attributable to the company’s operations in Hong Kong. This may require apportionment if the leasing activity involves vessels operating partly outside Hong Kong waters.
Box 9 - Total amount of deductible expenses attributable to qualifying ship leasing income
Enter the total expenses directly related to earning the income in Box 7. Only expenses that are deductible under the Ordinance should be included.
Box 10 - Net assessable profit (Box 8 minus Box 9)
This is the result of subtracting Box 9 from Box 8. If the result is negative, enter “0” or “Nil” as appropriate.
Section C - Declaration
Box 11 - Name of signatory
Enter the full name of the person signing the declaration. This must be a director, the company secretary, or another authorised officer of the company.
Box 12 - Capacity of signatory
State the signatory’s position in the company (e.g., Director, Company Secretary).
Box 13 - Signature
The signatory must sign here. The signature must be original - no photocopies or electronic signatures are accepted unless specifically allowed by the IRD.
Box 14 - Date
Enter the date of signing.
Important note: The declaration must be signed by a person who has authority to bind the company. If the signatory is not a director, attach evidence of authorisation (e.g., a board resolution). Do not leave any box blank - if a box does not apply, write “N/A”. The form does not require a company chop, but the IRD may request one if the signatory is not a director.
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