Form BIRS6 Professional Reinsurer Profits Tax Computation
How to file Form BIRS6 for the profits tax computation of a professional reinsurer in Hong Kong.
BIRS6 at a glance
- Official title
- Professional reinsurer
- 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We link the issuing authority's own index rather than hosting a copy, because the form is revised there and an out-of-date copy is worse than none.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 BIRS6 Professional Reinsurer Profits Tax Computation
The Form BIRS6 professional reinsurer profits tax computation is a supplementary form that accompanies the Profits Tax Return (BIR51) for a professional reinsurer authorised by the Insurance Authority. This form captures the specific income and deduction items unique to the reinsurance business and enables the Inland Revenue Department to assess the profits tax liability under the tax concession regime applicable to this sector.
Regulatory and Tax Context for Professional Reinsurers
A professional reinsurer in Hong Kong is an insurer that carries on reinsurance business and is authorised as a professional reinsurer under the Insurance Ordinance (Cap. 41). The Insurance Authority regulates these entities through a risk-based capital framework that requires the reinsurer to maintain solvency margins calculated on its underwriting and investment risks.
The Inland Revenue Department applies a specific tax concession to professional reinsurers. Under section 662 of the Inland Revenue Ordinance (Cap. 112), the assessable profits of a professional reinsurer from its offshore reinsurance business may be subject to a reduced profits tax rate. The concession recognises that the risks assumed by a Hong Kong professional reinsurer often originate outside the territory, and the tax treatment reflects the source principle that underpins Hong Kong's territorial tax system.
BIRS6 Professional Reinsurer Tax Hong Kong
The form is the primary mechanism through which a professional reinsurer reports its tax computation to the Inland Revenue Department. It requires the reinsurer to segregate its income and expenditure between onshore and offshore reinsurance business, because the tax concession applies only to the offshore component.
The BIRS6 professional reinsurer tax Hong Kong filing must include a detailed breakdown of premiums written, premiums ceded to retrocessionaires, claims paid and outstanding, and the reinsurer's share of unearned premiums. The form also captures investment income derived from assets backing the reinsurance liabilities, which is apportioned between the onshore and offshore books.
Form BIRS6 Reinsurance Profits Guide
When completing the Form BIRS6 reinsurance profits guide, the professional reinsurer must follow the instructions issued by the Inland Revenue Department. The form is structured as a series of schedules that correspond to the line items in the reinsurer's audited financial statements.
The key schedules on the form include:
| Schedule | Content |
|---|---|
| Schedule A | Gross premiums written and premiums ceded |
| Schedule B | Claims incurred and claims handling expenses |
| Schedule C | Commission income and commission expense |
| Schedule D | Investment income and investment expenses |
| Schedule E | Apportionment of profits between onshore and offshore business |
Each schedule requires the reinsurer to state the amounts in Hong Kong dollars and to provide a reconciliation to the amounts shown in the financial statements. The Inland Revenue Department may request supporting documentation, including the actuarial valuation of outstanding claims and the risk-based capital return filed with the Insurance Authority.
Inland Revenue Reinsurer Form
The Inland Revenue reinsurer form is filed together with the Profits Tax Return (BIR51) and the audited financial statements. The specified form must be submitted within the same filing deadline as the BIR51, which is generally one month from the date of issue of the return, unless an extension has been granted.
The Inland Revenue Department accepts the form in paper format or through the Business Tax Portal. For electronic filing, the form and the accompanying tax computation must be tagged in iXBRL format. The department has stated an intention to require electronic filing for all profits tax returns by 2030, and professional reinsurers should prepare their systems to submit Form BIRS6 through the portal.
Professional Reinsurer Tax Computation
The professional reinsurer tax computation on Form BIRS6 begins with the net underwriting profit as shown in the reinsurer's profit and loss account. The form then applies adjustments required by the Inland Revenue Ordinance, including:
- Disallowance of general provisions for unexpired risks, except where the Insurance Authority requires a specific reserve
- Deduction of the reinsurer's share of unearned premiums calculated on a time-apportionment basis
- Deduction of the reinsurer's share of outstanding claims, including claims incurred but not reported, as certified by the actuary
- Apportionment of overhead expenses between onshore and offshore business using a method acceptable to the Inland Revenue Department
The tax concession under section 662 reduces the profits tax rate on the offshore reinsurance profits to half the standard rate. The form requires the reinsurer to compute the concession separately and to state the resulting tax liability.
Filing Requirements and Supporting Documents
The professional reinsurer must attach to Form BIRS6 the following documents:
- A copy of the authorisation from the Insurance Authority as a professional reinsurer
- The audited financial statements and the auditor's report
- The actuarial report on outstanding claims and unearned premiums
- A schedule showing the apportionment of investment income between the onshore and offshore books
- A reconciliation of the tax computation to the financial statements
The Inland Revenue Department may also request the risk-based capital return filed with the Insurance Authority and the reinsurer's business plan for the year of assessment.
Penalties for Non-Compliance
Failure to file Form BIRS6 with the Profits Tax Return, or filing an incorrect form, may result in penalties under the Inland Revenue Ordinance. The department may assess additional tax and impose a penalty of up to three times the amount of tax undercharged. Professional reinsurers should ensure that the form is completed accurately and that all supporting documents are submitted on time.
How to fill out Form BIRS6
Page one of the official form. Every field named below appears on it in the same order.
Part 1 - General Information
1. Name of Professional Reinsurer
Enter the full legal name of the professional reinsurer as it appears on the Certificate of Registration issued by the Insurance Authority. Do not use trading names or abbreviations.
2. Address of Principal Place of Business in Hong Kong
Provide the complete physical address of the reinsurer’s main office in Hong Kong. This must be a street address, not a post office box. If the business is conducted from a registered office, use that address.
3. Business Registration Number
Copy the 8-digit Business Registration Number exactly as shown on the Business Registration Certificate issued by the Inland Revenue Department. Include the hyphen if present (e.g., 12345678-01).
4. Date of Commencement of Business in Hong Kong
Enter the date the reinsurer began carrying on professional reinsurance business in Hong Kong. This date must match the date recorded on the Certificate of Registration. Use the format DD/MM/YYYY.
5. Class of Business
Select the appropriate class from the options listed on the form. Common classes include “General Reinsurance” or “Long Term Reinsurance.” If the reinsurer is authorized for both, tick the relevant boxes.
Part 2 - Declaration
6. Declaration by the Professional Reinsurer
This section must be signed by the professional reinsurer’s authorized representative. The signatory must be a director, the company secretary, or a person authorized in writing by the board. The declaration confirms that the information provided is true and complete.
7. Name of Signatory
Print the full name of the person signing the declaration.
8. Capacity of Signatory
State the signatory’s official position (e.g., Director, Company Secretary, Authorized Representative).
9. Date of Declaration
Enter the date the declaration is signed. This must be on or after the date the form is completed.
10. Signature
The signatory must sign in ink. Digital signatures are not accepted unless the form is submitted electronically through the Government’s eTAX system.
Common Mistakes
- Date mismatch: The date of commencement of business (Box 4) must exactly match the date on the Certificate of Registration. A discrepancy will cause rejection.
- Business Registration Number: Do not use the company number from the Certificate of Incorporation. Only the BR number from the Business Registration Certificate is correct.
- Signatory authority: If the signatory is not a director or company secretary, attach a certified copy of the board resolution authorizing them to sign.
- Continuation sheets: If the reinsurer has more than one principal place of business or multiple classes of business, attach a separate sheet listing the additional details and reference the relevant box number.
No fee or deadline is stated on this form. The form should be filed with the Inland Revenue Department within the time frame specified in the relevant tax ordinance or as directed by the Department.
Download the current form - always file the version on the issuing authority's site, not a copy.
Sources
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