The Inland Revenue (Amendment) Ordinance 2014 amends section 14B of the Inland Revenue Ordinance (Cap. 112) and was gazetted in 2014, with the concession applying retrospectively from the year of assessment 2013/14 (1 April 2013).

Key contents:

1. Assessable profits of a captive insurer from the carrying on of offshore risk insurance business are taxed at one half of the corporate profits tax rate (i.e. 8.25%), which is a core tax incentive for attracting captive insurers to Hong Kong.

2. A subsequent amendment taking effect on 19 March 2021 extended the 8.25% concessionary tax rate to more insurance-related businesses.

3. It should be noted that, under the influence of the OECD BEPS 2.0 global minimum tax reform, the actual tax burden of a multinational group’s captive insurer in Hong Kong needs to be assessed together with the group’s overall effective tax rate in Hong Kong.

Text of the Ordinance: https://www.ird.gov.hk/eng/pdf/iro/gazette/ord_112_3_2014.pdf