Completing Form BIRS16 for qualifying ship agents in Hong Kong
Guide to Form BIRS16 for Hong Kong's qualifying ship agent tax concession, including eligibility, required particulars, and filing.
BIRS16 at a glance
- Official title
- Qualifying ship agent
- 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We link the issuing authority's own index rather than hosting a copy, because the form is revised there and an out-of-date copy is worse than none.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 BIRS16 Qualifying Ship Agent Hong Kong: Overview and Purpose
Form BIRS16 is the statutory form for a qualifying ship agent to claim the profits tax concession under the Inland Revenue Ordinance (Cap. 112). The filing is submitted to the Inland Revenue Department with the annual profits tax return. It allows the ship agent to report eligible income at the reduced tax rate, not the standard rate. This concession supports Hong Kong's maritime services sector by making the jurisdiction more competitive for ship agency operations.
Who Is a Qualifying Ship Agent
A qualifying ship agent is a person or corporation carrying on a ship agency business in Hong Kong and meeting the conditions in section 14X of the Inland Revenue Ordinance (Cap. 112). The business must involve arranging or negotiating ship management services, crew supply, or the procurement of ship supplies and repairs for ships the agent does not own or operate. The agent cannot be a ship-owner, ship operator, or ship manager for the same vessel. The Inland Revenue Department examines the services provided and the agent-ship-owner relationship to determine if the concession applies.
BIRS16 Form Guide: Completing the Form
This BIRS16 form guide covers the document's key sections. The form requires the following particulars:
- Name and business registration number of the ship agent
- Hong Kong address of the principal place of business
- Year of assessment for which the concession is claimed
- Details of each ship for which agency services were provided, including the ship name, IMO number, and the name of the ship-owner
- Description of the services provided to each ship
- Amount of eligible income derived from each ship
- Total eligible income for the year of assessment
- Tax computation showing the concession claimed
The taxpayer or an authorised representative must sign the form. Retain a certified true copy of the agency agreement or contract for each ship for inspection. Do not file it with the form unless the Inland Revenue Department requests it.
Ship Agent Tax Concession: Benefits and Conditions
The ship agent tax concession provides a reduced profits tax rate on qualifying income. Eligible income from ship agency services is taxed at 8.25 per cent, half the standard profits tax rate for corporations. For unincorporated businesses, the concession rate is 7.5 per cent. The concession applies only to income directly attributable to qualifying ship agency services. Income from other activities, such as cargo forwarding or logistics, is taxed at the standard rate.
To qualify, the ship agent must satisfy these conditions:
- The agent must be a person carrying on a ship agency business in Hong Kong
- The services must be provided to a ship not owned or operated by the agent
- The agent must not be connected with the ship-owner in a way that makes the arrangement a sham
- The agent must maintain proper records of the services provided and the income derived
The Inland Revenue Department may request additional information or documentation to verify the claim. Retain all relevant contracts, invoices, and correspondence for at least seven years after the end of the year of assessment.
Hong Kong Qualifying Ship Agent: Eligibility Criteria
A Hong Kong qualifying ship agent must meet the statutory definition in section 14X of the Inland Revenue Ordinance (Cap. 112). The definition requires the agent's business to consist wholly or partly of providing ship agency services. These services must be provided in Hong Kong, and the agent must have a physical presence here, such as an office and employees. The agent must also demonstrate the authority to act on behalf of the ship-owner in Hong Kong.
The Inland Revenue Department considers these factors when determining eligibility:
- The nature and extent of the services provided
- Whether the agent holds a licence or permit required under Hong Kong law
- Whether the agent has a genuine business presence in Hong Kong
- Whether the agent bears commercial risk in respect of the services
An agent that merely introduces a ship-owner to a service provider without performing substantive work is unlikely to qualify. The concession is for agents that actively arrange and manage the provision of services to ships.
Form BIRS16 Filing Guide: Submission Process
This Form BIRS16 filing guide explains submission to the Inland Revenue Department. File the form with the profits tax return for the relevant year of assessment. The Inland Revenue Department issues the return annually. Complete Form BIRS16 and attach it to the return. Submit the return and form through the Business Tax Portal for electronic filers or by post for paper filers.
Electronic filing is available through the Business Tax Portal. The taxpayer needs an eTAX account and must be registered for electronic filing. Financial statements and tax computation must be tagged in iXBRL format if the taxpayer is within the scope of mandatory electronic filing. Paper filing remains an option for those not subject to mandatory electronic filing. Complete the form in English or Chinese and sign it as the taxpayer or an authorised representative.
The Inland Revenue Department may issue a notice requiring additional information or documentation. Respond promptly to avoid assessment delays. The concession is granted in the assessment year the claim is made, provided the conditions are satisfied.
Eligible Income and Tax Computation
Eligible income is the gross income from qualifying ship agency services, less expenses directly attributable to that income. The tax computation must show eligible income separately from other income. Apply the concession rate to the eligible income and the standard rate to the remaining income. Prepare the tax computation in accordance with the Inland Revenue Ordinance and relevant practice notes from the Inland Revenue Department.
The Inland Revenue Department may examine the tax computation to ensure eligible income is correctly identified. Maintain a clear audit trail showing how the eligible income was calculated. The department may also request a breakdown of the expenses attributed to the eligible income.
How to fill out Form BIRS16
Page one of the official form. Every field named below appears on it in the same order.
Part 1 - Particulars of the Ship Agent
Box (1) - Name of Ship Agent
Enter the full legal name of the ship agent as it appears on the Business Registration Certificate. If the agent is a sole proprietor, use the individual’s name. For a partnership or company, use the registered business name.
Box (2) - Business Registration Number
Copy the 8‑digit number from the Business Registration Certificate. Do not include the “BR” prefix if shown.
Box (3) - Address of Principal Place of Business
Give the complete physical address of the agent’s main office in Hong Kong. A PO Box is not acceptable; the street name, building, floor, and unit are required.
Box (4) - Telephone Number
Provide a contact telephone number for the agent. Include the area code (852) if the number is not in local format.
Box (5) - Fax Number
Enter the fax number, again including the area code if necessary. Leave blank if no fax is used.
Box (6) - Email Address
Enter the email address of the agent or its designated contact person.
Box (7) - Name and Position of Person Making this Declaration
Write the full name (surname first, then given names) and the official position (e.g., Director, Secretary, Authorised Signatory) of the individual completing the declaration. This person must be authorised by the agent.
Box (8) - Name of Ship Owner / Agent / Charterer
State the legal name of the ship owner, the appointing agent, or the charterer. This is the party that has appointed the Hong Kong agent.
Box (9) - Address of Ship Owner / Agent / Charterer
Provide the full address of the party named in Box (8). If overseas, include the country.
Part 2 - Declaration
Box (10) - Specified Period
Indicate the period covered by the declaration. Typically this is a calendar month or quarter, written as “from [DD/MM/YYYY] to [DD/MM/YYYY]”. The period must match the accounting records for the agent’s qualifying activities.
Box (11) - Nature of the Agent’s Business
Briefly describe the principal services the agent provides to ships (e.g., “arranging port clearances, cargo documentation, crew changes”). Avoid vague terms like “ship management” unless that is the exact scope.
Signature Block
Signature - The declaration must be signed by the person named in Box (7). This is a statutory declaration; signing without proper authority may invalidate the form.
Date - Enter the date of signing. Use the format DD/MM/YYYY. This date must be on or after the end of the period stated in Box (10).
Common mistakes to avoid
- Dates mismatch - The “Specified Period” end date cannot be later than the date of signing.
- BR number transposed - Inverting digits leads to rejection; check against the certificate.
- Box (11) too generic - A list like “agency services” is insufficient; be specific enough to show the business is a qualifying ship agent.
- Signature by unauthorised person - Only the person named in Box (7) may sign; a junior clerk cannot substitute.
If additional ships or owners need to be listed, use a separate sheet headed “Continuation of BIRS16 - Box (8)/(9)” and attach it. No other continuation sheet is required.
Download the current form - always file the version on the issuing authority's site, not a copy.
Sources
More on the forms library.