Completing Form BIRS13 for specified insurers in Hong Kong

Understanding Form BIRS13: The Specified Insurer Tax Concession in Hong Kong

A qualifying insurer uses Form BIRS13 specified insurer Hong Kong to apply for the tax concession on offshore insurance business. The form is filed with the Inland Revenue Department (IRD) to report eligible income and claim a reduced profits tax rate under the Inland Revenue Ordinance (Cap. 112).

A "specified insurer" is an insurer authorised under the Insurance Ordinance (Cap. 41) to carry on insurance business in Hong Kong. The concession applies to profits derived from offshore risks - insurance or reinsurance of risks located outside Hong Kong. The concession rate is 8.25% (half the standard 16.5% profits tax rate) on qualifying income, provided the insurer meets the conditions set out in section 23B of Cap. 112.

The IRD issues Form BIRS13 as a supplementary schedule to the Profits Tax Return (BIR51). It must be completed and submitted with the tax return, the tax computation, and the audited financial statements for the relevant year of assessment.

BIRS13 Form Instructions

The BIRS13 form instructions are published by the Inland Revenue Department and should be read before completing the form. The instructions specify who must file, what to attach, and how to file.

Any authorised insurer that wishes to claim the concession for a year of assessment must file. Attach a certified true copy of the Insurance Authority's authorisation, a breakdown of gross premiums written by territory of risk, and a tax computation showing the apportionment of profits between onshore and offshore business.

File through the Business Tax Portal. This is mandatory for most corporate filers from the year of assessment 2025-26 onwards. Paper filing is only permitted if the IRD has granted an exemption from electronic filing.

The concession is not automatic. The insurer must elect to be taxed under section 23B by completing Part 2 of Form BIRS13. Without the election, the full 16.5% rate applies to all assessable profits.

Specified Insurer Tax Concession

The specified insurer tax concession is a targeted relief designed to keep Hong Kong competitive as an insurance hub. It applies to offshore insurance business (premiums from insuring or reinsuring risks situated outside Hong Kong) and offshore reinsurance business (premiums accepted from other insurers for risks located outside Hong Kong).

The concession does not apply to onshore insurance business (risks located in Hong Kong) or business written through a permanent establishment outside Hong Kong. That income is taxable in the foreign jurisdiction under the source principle.

To qualify, the insurer must maintain separate accounts for offshore and onshore business, or provide a reasonable basis of apportionment acceptable to the IRD. The IRD typically accepts an apportionment based on gross premiums written, but the insurer must justify the method in the tax computation.

Hong Kong Specified Insurer Form

The Hong Kong specified insurer form - Form BIRS13 - is structured in three parts.

Part 1 covers insurer particulars: name, business registration number, IRD file number, and the year of assessment. Part 2 is the election for the concession, where the insurer confirms it elects to be taxed under section 23B and declares that it meets the qualifying conditions. Part 3 contains the computation of eligible income, a schedule showing gross premiums written, offshore premiums, and the resulting assessable profits at the concession rate.

A director or company secretary of the insurer must sign the form. If the insurer is a branch of a foreign insurer, the authorised representative in Hong Kong must sign.

Form BIRS13 Filing Guide

This Form BIRS13 filing guide covers the key steps for a compliant submission.

First, determine eligibility. Confirm that the insurer is authorised under Cap. 41 and that the income in question arises from offshore risks. Review the IRD's Departmental Interpretation and Practice Notes (DIPN) on the subject for detailed guidance.

Next, prepare supporting documents. Assemble the audited financial statements, the tax computation, and a certified true copy of the Insurance Authority's authorisation. If the insurer uses an apportionment method, include a schedule showing the calculation.

Complete the form. Fill in Part 1 with the insurer's particulars. In Part 2, tick the election box and sign. In Part 3, enter the gross premiums written and the offshore proportion. The IRD expects the figures to match the audited accounts.

File through the Business Tax Portal. Log in to the portal, select the relevant year of assessment, and upload the completed Form BIRS13 together with the BIR51, the tax computation in iXBRL format, and the financial statements. The portal will generate an acknowledgement.

Finally, keep a copy. Retain a copy of the filed form and the acknowledgement for your records. The IRD may request further information during the assessment process.

Assessment Year and Tax Computation

The assessment year for which Form BIRS13 is filed is the year of assessment (YA) corresponding to the accounting period. For example, if the insurer's accounting period ends on 31 December 2025, the relevant YA is 2025-26. The form must be submitted by the due date stated on the Profits Tax Return (usually within one month of the issue date, extendable on application).

The tax computation must show total assessable profits (before the concession), offshore profits eligible for the concession, tax at 8.25% on offshore profits, tax at 16.5% on onshore profits, and the total tax payable.

The IRD will verify the computation against the financial statements and the Form BIRS13. Any discrepancy may trigger an enquiry.

Electronic Filing and IXBRL

From the year of assessment 2025-26, the IRD mandates electronic filing for most corporate taxpayers, including specified insurers. The Business Tax Portal accepts Form BIRS13 as an attachment to the BIR51. The tax computation and financial statements must be tagged in iXBRL (Inline eXtensible Business Reporting Language) using the IRD's taxonomy.

The IRD provides a free iXBRL preparation tool on its website. Insurers should test their tagged files before submission to avoid rejection. A certified true copy of the Insurance Authority's authorisation can be uploaded as a PDF.

Summary of Key Points

• Form BIRS13 is the supplementary schedule for the specified insurer tax concession.
• The concession reduces the profits tax rate to 8.25% on offshore insurance income.
• The form must be filed with the BIR51, tax computation, and audited financial statements.
• Electronic filing through the Business Tax Portal is mandatory for most insurers from YA 2025-26.
• The IRD's instructions and DIPN provide detailed guidance on eligibility and apportionment.

For the latest version of Form BIRS13 and the accompanying instructions, visit the Inland Revenue Department's forms index at https://www.ird.gov.hk/eng/paf/bus.htm.