Inla
nd Revenue Department
The Government of the Hong Kong Special Administrative Region
of the People's Republic of China
DEPARTMENTAL INTERPRETATION AND PRACTICE NOTES
NO. 33 (REVISED)
INSURANCE AGENTS
These notes are issued for the information of taxpayers and their tax
representatives. They contain the Department’s interpretation and practices in
relation to the law as it stood at the date of publication. Taxpayers are
reminded that their right of objection against the assessment and their right of
appeal to the Commissioner, the Board of Review or the Court are not affected
by the application of these notes.
These notes replace those issued in June 1998.
LAU MAK Yee-ming, Alice
Commissioner of Inland Revenue
October 2009
Our web site : www.ird.gov.hk
DEPARTMENTAL INTERPRETATION AND PRACTICE NOTES
No. 33 (REVISED)
CONTENT
Paragraph
Introduction
Background 1
Profits tax or salaries tax 4
Tax treatment under profits tax
Income chargeable under section 14 6
Upfront payments 7
Lump sum for cancellation of contractual rights 11
Commission from own or family member insurance 13
policies
Allowable deductions 15
Apportionment of expenses 21
Business records to be kept
Section 51C 23
Tax treatment under salaries tax
Income chargeable under section 8 27
Upfront payments 28
Deduction under salaries tax 34
Penal provisions
Sections 80, 82 and 82A 35
Business registration
Registration of business 36
Exemption from payment of business registration fee 37
and levy
Appendix A
Insurance Agents - Examples of queries concerning
expenses claimed as deductions
INTRODUCTION
Background
This Departmental Interpretation and Practice Notes No. 33 (DIPN
33) was first issued in June 1998, and serves to assist insurance agents in
understanding and meeting their tax obligations. For the purposes of DIPN 33,
the term “insurance agent” means an individual who holds himself out to
advise on or arrange contracts of insurance as an agent or sub-agent of one or
more insurers (i.e. persons carrying on insurance business).
2. In the 1998 version of DIPN 33, it was mentioned that during 1996
the Department noticed that the record keeping standards of a large number of
self-employed insurance agents were unsatisfactory and was faced with the
likelihood of considerable administrative difficulties in ascertaining the correct
assessable profits of the individuals concerned. Following consultations with
a number of associations representing insurance agents, the Department agreed,
as an exceptional matter and for the sake of expediency and consistency, that
where no books or records were available, an amount equivalent to 1/3 of
commission income would be allowed as deductible outgoings and expenses.
That practice was, however, only applicable in respect of assessments for the
year of assessment 1995/96 and prior years. Since 1998, the Board of Review
and the Court have delivered several decisions involving insurance agents or
having impact on the tax liability of insurance agents. Thus, there is a need to
revise the 1998 version to bring it up-to-date.
3. This revision will also highlight the requirements of certain
provisions in the Inland Revenue Ordinance (Cap. 112) (the Ordinance) and the
Business Registration Ordinance (Cap. 310) which are applicable to insurance
agents.
Profits tax or salaries tax
4. Insurance agents who are self-em
ployed are assessed under the
profits tax provisions of the Ordinance, whereas those who are employees are
assessed under the salaries tax provisions. Whether an insurance agent is an
employee or self-employed is a question of fact. Generally, the situation will
be obvious. If an individual is employed to solicit and negotiate insurance
contracts on behalf of his employer, then the remuneration therefrom should
clearly be charged to salaries tax. On the other hand, if the individual has
taken out business registration and carries on an insurance agency business on
his own account, he should be assessed to profits tax in respect of the profits so
derived.
5. In case of doubt, assistance in ascertaining the correct position can
be obtained by applying objective tests (e.g. the control test, the integration test,
the economic reality test and mutuality of obligation test) to the relationship
between the insurance agent and the insurer. If the relationship is ambiguous,
the contract may become the best material from which to gather the true legal
relationship: see Massey v. Crown Life Insurance Co. [1973] 1 All ER 576.
TAX TREATMENT UNDER PROFITS TAX
Income chargeable under section 14
6. In general, a self-employed insurance agent would derive from his
carrying on of a business in Hong Kong income such as commission, agency
fees, bonus, allowances, etc. It is generally accepted that those receipts are
taxable under section 14 of the Ordinance, but it is not unusual that some
insurance agents would object to the taxation of certain categories of receipts.
Set out below are the details of how the Department views the taxation of such
receipts.
Upfront payments
7. A self-employed i
nsurance agent may receive from an insurer
upfront payments such as “initial signing fees”, “goodwill payments”, “sign-on
bonus”, etc. The insurer usually pays the upfront payments to the insurance
agent after the latter registers and commences service as the insurer’s agent.
The agency service agreement entered into by the insurance agent with the
insurer normally contains, among others, the following terms:
(a) the upfront payments have to be set off against commission
income which will be earned by the insurance agent over a
period of time commencing from or around the agreement
date; and
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(b) where the insurance agent fails to remain in service for a
minimum service period or “lock-up” period, he will have to
repay all or part of the upfront payments to the insurer.
8. The upfront payments are reported to the Department in the year
when the payments are paid to the agent. However, the agent may adopt one
of the following approaches in drawing up his profit and loss account:
(a) exclude the whole of the upfront payment from his income on
the ground that the payment is a loan;
(b) divide the upfront payment by the number of months in the
minimum service period and recognize an appropriate fraction
as income in the respective years; or
(c) include the whole upfront payment as income in the year
when the minimum service period expires (i.e. when the right
to ask for repayment is waived by the insurance company).
9. The Department would not accept the approaches in paragraph 8 to
ascertain the assessable profits of an insurance agent. The upfront payment is
paid because the agent agrees to the appointment and to remain as the
company’s agent. Once the upfront payment is received, the insurance agent
holds the sum beneficially and is entitled to use it for whatever purposes he
likes, including for his trade and business. In any event, the upfront payment
is clearly a trading receipt chargeable to profits tax. In Lo Tim-fat v. CIR 6
HKTC 725, the taxpayer argued that only 20 per cent instead of the entire
amount of his initial signing fee, balance of initial signing fee and monthly
bonus should be subject to profits tax in the year concerned as he had to refund
part of the lump sum to the insurance company if the engagement was
terminated within 5 years. In dismissing the taxpayer’s appeal, the court
followed the ratio in Smart v. Lincolnshire Sugar Co. Ltd. [1937] 20 TC 643
and made the following comments at 741:
“In Smart v. Lincolnshire Sugar Co. Ltd…. the House of Lords
decided that notwithstanding that the amounts were described as
advances in truth the payments were not in the nature of loans at all.
The payments were made to the taxpayer in order that the money
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might be used in its business. They were supplementary trading
receipts bestowed upon the taxpayer by the Government and proper
to be taken into computation in arriving at the balance of the
taxpayer’s profits and gains for the year in which they were received.
Even though the amounts were repayable upon certain contingencies,
they should not be treated as trading receipts only when it could be
certain that the repayment was not required.
In the present case, once the amount of the Balance of Signing Fee
was received, the Appellant held the sum beneficially and was
entitled to use it for whatever purpose he liked including for his trade
and business. Although there was a possibility that he might have
to repay part of the amount received to AIA in the future, on the
authority of Smart v. Lincolnshire Sugar Co. Ltd., I am of the view
that the amount should properly be considered to be part of his
trading receipt for the year when the sum was received and accrued
to him.”
10. Hence, it is not open for an insurance agent to argue that the upfront
payments are not trading receipts or even if they are trading receipts, they
should be assessed pro rata over the minimum service period. The
Department will examine the terms of the contracts entered into between the
insurance company and the agent to ascertain the year in which the upfront
payment accrued to the taxpayer as income. The upfront payments will be
taxable in the year when the amounts accrue to the insurance agent.
Lump sum for cancellation of contractual rights
11. In the course of his busi
ness, an insurance agent may for some
reasons relinquish and forfeit all or part of certain contractual rights in
consideration of a lump sum payment from the insurance company. The
question of whether the lump sum receipt is of capital or revenue nature is a
question of mixed fact and law and all surrounding circumstances, including
the nature of the contractual rights which were cancelled or terminated and the
effect that cancellation or termination had on the capital structure of the
insurance agent’s business, have to be considered. In this regard, the Board of
Review in Case No. D12/90 5 IRBRD 118, said at 121 and 122:
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“It is clear from the decided cases that where a person is carrying on
a trading or agency type business, sums of money which the person
receives for changing or giving up agencies or agency rights are to
be construed as being payments received in the course of carrying on
the business unless it is clear from the facts that the payment is of a
capital nature…. The question to be answered is whether or not the
rights or benefits which the Taxpayer was entitled to under her
agreement with the insurance company comprised a capital asset of
her business.
In the present case, … it is clear that the business of the Taxpayer
continued after the receipt of this lump sum payment much as it had
done before. We cannot see any justification for finding on the
facts that the rights given up by the Taxpayer were capital assets of
her business. She was doing no more than accepting a lump sum
payment in exchange for giving up the right to receive override
commissions in respect of two out of seven “units”. The Taxpayer
had not invested any capital in acquiring these “units” and indeed so
far as we are aware, she had no formal contractual relationships with
the “units”. Her contractual relationship was with the insurance
company. In all of the circumstances, we find on the facts that the
payment received was a trading receipt received in the course of the
business of the Taxpayer and accordingly is subject to profits tax.”
12. The Department will look at all relevant facts of each case in
determining whether the receipt is capital or revenue in nature. In general,
amounts received in connection with the cancellation or variation of agency
contracts made in the course of the carrying on of the business of an insurance
agent are of a revenue nature and chargeable to profits tax. Where the
contract or right which has been cancelled relates to the whole structure of the
insurance agency business, the Department would consider whether the amount
received for the cancellation of right is of a capital nature and thus excluded
from the computation of assessable profits.
Commission from own or family member insurance policies
13. On occasion, an insurance agent may earn commission in respect of
the insurance policies taken out by himself or his family members. The
5
Department holds the view that just like transactions with other ordinary
customers, the insurance agent acts in the name and on behalf of the insurer in
introducing, proposing and carrying out work preparatory to the conclusion of,
or in concluding, those contracts of insurance, or in assisting in the
administration and performance of such contracts.
14. The insurance agent derives commission income in respect of the
policies taken out by him or his family members with the insurers in return for
his services rendered in the ordinary course of carrying on of the insurance
agency business. The commission income concerned has no difference from
that earned from other ordinary customers. In the circumstances, the
commission so earned is clearly a trading receipt chargeable to profits tax.
Allowable deductions
15. Expenditur
e incurred by a self-employed insurance agent generally
qualifies for deduction if it satisfies the requirements of section 16(1) of the
Ordinance and is not precluded under the provisions of section 17. Broadly
put, in arriving at the assessable profits, deductions are allowed in respect of:
(a) all outgoings and expenses to the extent to which they are
incurred by the agent during the basis period for the year of
assessment in the production of profits in respect of which he
or she is chargeable to tax;
but excluding:
(b) domestic or private expenses, including the cost of travelling
between residence and place of business;
(c) any expenditure of a capital nature or any loss or withdrawal
of capital;
(d) rent of, or expenses in connection with, any premises or part
of premises not occupied or used for the purpose of producing
chargeable profits; and
6
(e) any remuneration or interest on capital or loans payable to the
agent or the agent’s spouse in the case of a sole proprietorship
business, or to a partner or a partner’s spouse in the case of a
partnership business.
16. Although the circumstances and modus operandi of an individual
agent can obviously have a bearing on the expenditure which will qualify,
deductions are commonly allowed in respect of the following:
(a) commission paid to sub-agents and runners;
(b) salaries to employees;
(c) employee benefits;
(d) incentives to sub-agents;
(e) gifts and souvenirs; and
(f) entertainment expenses.
17. As mentioned in paragraph 7 above, an insurance agent may have to
repay the upfront payments to the insurance company if his service with the
insurance company is prematurely terminated. Such repayments made in
pursuant to the terms of the contract can be accepted as deductible under
section 16(1) of the Ordinance in the year in which the contingencies giving
rise to the repayment are crystallized. If a provision is made in the profit and
loss account during the basis period in which the contingent liability is
crystallized but the actual repayment was made after the accounting year-end
date, a deduction can be allowed in the year of provision. In order to qualify
for deduction, the insurance agent must prove the date on which his liability to
repay was crystallized, which might not be the same year as the year when the
upfront payments were assessed to tax. He will also be required to provide
documentary evidence, such as confirmation from the insurance company, to
substantiate his claim.
18. It should be apparent from paragraphs 23 to 26 below that generally
the insurance agent must be able, if requested, to produce documentary
7
evidence to substantiate any deduction claimed. It should be noted that the
onus of proving that an expense is deductible is not necessarily discharged by
producing the relevant ledger account. In So Kai Tong, Stanley trading as
Stanley So & Co. v. CIR 6 HKTC 38, Chu J said at 86:
“The ledger is only a secondary document. It would be incumbent
upon the appellant to adduce the primary documents to support his
case.”
19. Furthermore, it should be noted that the onus of proving that an
expense is deductible is not necessarily discharged by producing the relevant
receipt. The taxpayer must also be able to establish to the satisfaction of the
Assessor that the expense was incurred in the production of assessable profits.
In Board of Review Decisions Case No. D1/06 21 IRBRD 102, the Board
rejected the insurance agent’s claim that the alleged written agreements with
sub-agents and staff and receipts of expenses were contemporaneous. On the
facts of that case, the Board held that the insurance agent did not incur any of
the sums she claimed to have been incurred, and even if any such expenses had
been incurred, they were of a domestic or private nature and not incurred in the
production of assessable profits.
20. Examples of questions which may be asked by the Department for
the purpose of establishing whether a deduction claimed is allowable are set out
in Appendix A.
Apportionment of expenses
21. Where an outgoing or expense is not wholl
y incurred in the
production of assessable profits, for example, the expense is partly of a private
nature, the full amount of the expenditure cannot be claimed as a deduction.
In So Kai Tong, Chu J said at 81:
“(Once) the Commissioner, on the material before her, comes to the
view that only part of the outgoing or expense under examination is
incurred for the production of chargeable profits, she is under a duty
to ascertain the extent to which such outgoing and expense is so
incurred. In performing the task, regards will have to be made to
Rule 2A of the Inland Revenue Rules.”
8
22.
Rule 2A of the Inland Revenue Rules provides that for the purpose
of ascertaining the extent to which the out
going or expense is deductible under
section 16 of the Ordinance, it should be apportioned on such a basis as is most
appropriate to the activities of the business. Accordingly, where such an
expense has been incurred, the basis of apportionment of the expense to be
claimed as a deduction should be clearly detailed in the taxpayer’s return.
Further guidance as to the apportionment of expenses is contained in
Departmental Interpretation and Practice Notes No. 3 (Revised) - Profits tax -
Apportionment of expenses.
BUSINESS RECORDS TO BE KEPT
Section 51C
23. Section 51C of t
he Ordinance requires every person carrying on
busi
ness in Hong Kong to keep sufficient records in the English or Chinese
language of his income and expenditure to enable the assessable profits of the
business to be readily ascertained. Business records must be retained for at
least 7 years. Failure to keep the prescribed records may result in a fine of up
to $100,000.
24. For the purposes of section 51C, the term “records” is defined to
include:
(a) books of account (whether kept in a legible form, or in a
non-legible form by means of a computer or otherwise)
recording receipts and payments, or income and expenditure;
and
(b) vouchers, bank statements, invoices, receipts and such other
documents as are necessary to verify the entries in the books
of account.
25. Section 51C also provides, so far as is relevant, that the records
required to be kept in respect of a business carried on during any year of
assessment by any person include:
9
(a) a record of the assets and liabilities of the person in relation to
the business;
(b) a record of all entries from day to day of all sums of money
received and expended by the person in relation to the
business and the matters in respect of which the receipt and
expenditure take place; and
(c) as the business of an insurance agent involves the provision of
services, records of the services provided in sufficient detail
to enable the Commissioner of Inland Revenue to readily
verify the entries referred to in (b) above.
26.
Further information concerning record keeping requirements is
provided in the pamphlet
“A Guide to Keeping Business Records” which can
be downloaded from the Department’s web site: www.ird.gov.hk.
TAX TREATMENT UNDER SALARIES TAX
Income chargeable under section 8
27. Where an insurance agent is an employee chargeable to salaries tax,
his income
arising in or derived from Hong Kong from an employment of
profit is assessable under section 8(1) of the Ordinance.
Upfront payments
28. In accordance with the terms of
employment contract, an insurance
agent may receive from the insurance company upfront payments upon
commencement of employment. Where the insurance agent terminates the
employment within the minimum service period, all or part of the upfront
payments may have to be repaid to the insurance company.
29. The Board of Review has in several cases held that upfront payments
are income from employment under section 9(1) of the Ordinance, see for
example, Board of Review Decisions Case No. D3/94 9 IRBRD 69, Case No.
D24/05 20 IRBRD 382 and Case No. D26/07 22 IRBRD 601.
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30. In Board of Review Decisions Case No. D60/97 12 IRBRD 367, the
Board summarized the applicable law succinctly at 374 as follows:
“On the basis of various authorities brought to our attention,
including Hochstrasser v. Mayes (1959) 38 TC 673 per Viscount
Simonds at 705, to be liable to salaries tax the Sum must arise from
the employment, be referable to the services the Taxpayer rendered
by virtue of his office and must be something in the nature of a
reward for services past, present and future.”
31. The English authorities are also relevant. In Shilton v. Wilmshurst
[1991] STC 88, Lord Templeman had this to say at 91:
“Section 181 (of the Income and Corporation Taxes Act 1970) is not
limited to emoluments provided in the course of employment; the
section must therefore apply first to an emolument which is paid as a
reward for past services and as an inducement to continue to perform
services and, second, to an emolument which is paid as an
inducement to enter into a contract of employment and to perform
services in the future. The result is that an emolument “from
employment” means an emolument ‘from being or becoming an
employee’.”
32. In Case No. D26/07, the appellant received a sign-on bonus and
settling-in allowance at the commencement of his employment for agreeing to
work with the employer for a minimum period of 12 months. Upon his
resignation, he refunded to the employer a pro-rata portion of the sign-on bonus
and settling-in allowance as he did not complete the minimum employment
period. Insofar as the deduction of repayment of upfront payments under
section 12(1)(a) of the Ordinance is concerned, the Board of Review said at
605:
“In our view, the sum refunded was not paid wholly, exclusively and
necessarily incurred in the production of assessable income, and is in
any event of a capital rather than recurrent nature.”
However, the Board was of the view that on the proper construction of the
contract of employment, the appellant was only entitled to receive the full
11
sign-on bonus and settling-in allowance contingent on his having served the
full 12 months from the date of employment. The appellant was not entitled
to the full sign-on bonus or the full settling-in allowance.
33. The Department will follow the Board’s decision in Case No.
D26/07. Where the contract is terminated before the expiry of the minimum
service period and the insurance agent has to repay part of the upfront
payments in accordance with the terms of employment contract with the insurer,
upon application by the insurance agent concerned, the Department would
consider revising the salaries tax assessment, which has previously included the
upfront payments, to reflect the sum repaid. In the circumstances, the
Department would accept that the amount of income previously chargeable is
subject to a contingency bearing upon the actual amount of income which
should be brought to tax. In supporting such an application, the insurance
agent has to provide sufficient documentary evidence to substantiate his claim
of refund.
Deduction under salaries tax
34.
In order to be deducted from assessable incom
e under section
12(
1)(a) of the Ordinance, expenses incurred by an employed insurance agent
must have been incurred “in the production of the assessable income”, and
equally must have been “wholly and exclusively” as well as “necessarily”
incurred.
Although an expense might have been incurred “for” the production
of assessable income, it might not be incurred “in” the production of that
income if it is not directly referable to the performance of duties in doing the
work required under his employment.
The expenses might be personal to the
insurance agent arising from the terms of his contract of employment with the
insurance company. In Roskams v. Bennett 32 TC 129, the judge rejected an
insurance agent’s contention that 20 per cent of the expenditure on rent, rates,
electricity, gas and water should be allowed for deduction. Further guidance
as to the deductibility of expenses under salaries tax is contained in
Departmental Interpretation and Practice Notes No. 9 (Revised) - Major
deductible items under salaries tax.
12
PENAL PROVISIONS
Sections 80, 82 and 82A
35. The Ordinance provides in sections 80 and 82 for penalties to be
imposed where taxpayers fail to comply with certain obligations under the
legislation without reasonable excuse or wilfully with intent to evade tax.
Depending on the nature of an offence, penalty by way of imprisonment or fine
(or both) can be imposed: see The Queen v. Ng Wing-keung, Paul and Choi
Sin-biu 4 HKTC 264. The Ordinance also provides in section 82A that in
some circumstances, as an alternative to prosecution action, the Commissioner
or a Deputy Commissioner may impose additional tax. In such cases the
maximum additional tax is three times the amount of tax undercharged or that
which would have been undercharged if the matter had not been detected.
BUSINESS REGISTRATION
Registration of business
36. Under the provisions of the Business Registration Ordinance, every
person carrying on any business must register his business with the Business
Registration Office within one month of the commencement of the business.
Failure to do so may result in a fine of up to $5,000 and imprisonment for one
year. Further information concerning business registration is available at the
Department’s web site.
Exemption from payment of business registration fee and levy
37. A person, other tha
n a company incorporated or registered under the
Companies Ordinance, can apply for exemption from payment of the business
registration fee and levy (i.e. contribution to the Protection of Wages on
Insolvency Fund) if the average monthly sales or receipts of his business do not
exceed the following limits:
(a) For businesses mainly deriving profits from the sale of
services - $10,000; and
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(b) For other businesses - $30,000.
38. Application for exemption should be made in Form 3 (which can be
obtained from the Business Registration Office at 4/F, Revenue Tower, 5
Gloucester Road, Wan Chai, Hong Kong or downloaded from the
Department’s web site) and forwarded to the Commissioner not later than one
month before the date of expiry of the current business registration certificate.
An application for exemption, if applicable, must be made each year.
14
Appendix A
Insurance Agents
Examples of queries concerning expenses claimed as deductions
Advertising and/or Promotional Expenses
Provide the following information in respect of each expense claimed –
(a) the amount;
(b) full details of how the expense was incurred;
(c) the name and address of the party to whom the payment was made; and
(d) a copy of any receipt received.
Conference and/or Seminar Expenses
Provide the following information in respect of each conference/seminar –
(a) the name of the person(s) who attended;
(b) the relationship, if any, between the person who attended and the
insurance agent;
(c) a copy of the programme;
(d) the name and address of the organizer;
(e) the date and venue; and
(f) the amount and nature of each expense incurred with a copy any receipt
received.
Employee Benefits / Staff Benefits / Incentives to Sub-agents, etc.
Provide the following inform
ation in respect of each expense claimed –
(a) the amount;
(b) full details of the nature of the benefit/incentive;
(c) a copy of any voucher or receipt received;
(d) names of the employees/sub-agents who received the benefit/incentive
and the amount received by/attributable to each; and
(e) criteria for eligibility to the benefit/incentive.
Entertainment Expenses
Provide a schedule setting out in respect of each expense incurred –
(a) the nature of the entertainment;
(b) the date, venue and amount, with a copy of any receipt received;
(c) the name and address of each person entertained, and relationship, if any,
with the insurance agent; and
(d) the specific business transaction(s), if any, discussed/negotiated during
the occasion of the entertainment, and the result thereof.
Gift / Souvenirs Purchased
Provide a detailed schedule showing in respect of each purchase –
(a) the date of purchase;
(b) the item purchased;
(c) the amount incurred with a copy of any receipt received;
(d) the name, address and telephone number of the recipient;
(e) the relationship between the insurance agent and the recipient of the
gift/souvenir;
(f) if the recipient of the gift/souvenir was a client, state the number of each
insurance policy purchased by the person through the agent, the nature
of the insurance, the amount insured and the annual premium payable;
and
(g) a list of gifts and souvenirs, if any, held at the end of the accounting
period.
Motor Car – Repairs and Maintenance Expenses
Provide a s
chedule showing in respect of each repair or maintenance expense
claimed –
(a) the nature of the expense;
(b) the amount of the expense with a copy of any receipt received;
(c) the licence number of the car in respect of which the expense was
incurred;
(d) the name and address of recipient;
(e) the mode of payment (if by cheque, state the cheque number and the
name of the bank upon which drawn); and
ii
(f) the name and address of the owner of the car, and his/her relationship, if
any, with the insurance agent.
Mortgage Interest Paid
Provide the following information in respect of each loan for which interest has
been claimed –
(a) the amount of interest claimed;
(b) details of the loan, including the name of the mortgagor, name of the
mortgagee, amount of the loan, date of advance of the loan and
location(s) of property covered by the mortgage; and
(c) reasons for considering the interest was incurred in the production of
assessable profits.
Office Rent
Provide the following information in respect of each office for which a rental
expense has been claimed –
(a) the amount of rent claimed with copies of all rental receipts;
(b) the address of the premises;
(c) the period of tenancy;
(d) full details of how and by whom the premises were used during the basis
period;
(e) the name, identity card number, address and telephone number of the
recipient of the rent, and his/her relationship, if any, with the insurance
agent;
(f) details of any other user of the premises; and
(g) a copy of the stamped tenancy agreement.
Overseas Travelling Expenses
Provide the following information
in respect of each trip –
(a) the name of each person who took the trip and his/her relationship, if
any, with the insurance agent;
(b) copies of vouchers or receipts in respect of expenses claimed;
(c) full details of each expense incurred, including the date, nature and
amount of the expense; and
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(d) an explanation of why it is considered the expenses were incurred in the
production of assessable profits.
Rebates / Discounts to Customers
Provide a detailed schedule showing in respect of each transaction –
(a) the name
, address and telephone number of the client;
(b) the num
ber of each insurance policy purchased by the client;
(c) the amount of gross commission received and rebate/discount given; and
(d) an explanation of how the rebate/discount was effected with
documentary evidence in support.
Also indicate the date, mode and
amount of each payment.
Salaries / Commission to Sub-agents / Runners
(I) Provide the following information in respect of each sub-agent/runner –
(a) the name, address, telephone number and identity card number;
(b) the period of em
ployment and amount of salaries/commission
received by the person;
(c) the basis upon which the commission, if any, was calculated;
(d) if employed on a part-time basis, state the person’s full-time
occupation, if known;
(e) the relationship, if any, with the insurance agent other than as an
employee;
(f) documentary evidence showing when and how the
salary/commission payments were made to the recipient (if made
by cheque, state the name of the bank upon which drawn, the
account number and the cheque numbers); and
(g) the name and address of the policy holder and the number of the
insurance policy in respect of each policy concluded through the
sub-agent/runner.
(II) Forward a list of all the policies introduced to the insurance agent by
sub-agents and successfully concluded during the year showing in
respect of each policy –
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(a) the name and address of the policy holder;
(b) the name of the sub-agent who introduced the policy holder to the
insurance agent;
(c) the commission received by the insurance agent from the
insurance company; and
(d) the commission paid by the insurance agent to the sub-agent.
(III) Forward a copy of any employees’ compensation insurance policy held
in respect of the sub-agents
Staff Salaries
(I) Provide the following information in respect of each employee –
(a) the name, address, telephone number and identity card number;
(b)
the period of employment and salary received;
(c) the capacity in which employed;
(d) his/her education level;
(e) a detailed description of his/her duties;
(f) the location(s) at which he/she discharged his/her duties;
(g) the days normally worked each week and his/her normal working
hours;
(h) if employed on a part time basis, state his/her full time
occupation, if known;
(i) the relationship, if any, with the insurance agent other than as an
employee; and
(j) documentary evidence showing when and how the salary
payments were made.
(II) Forward a copy of any employees’ compensation insurance policy held
in respect of the employees.
Addition to Fixed Assets
Provide the following information in respect of each asset –
(a) a copy of the voucher for the acquisition of the asset; an
d
(b) a full description of the asset acquired.
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