CFC 2014/02
Issued
10 Feb 2014

Non-attributing active insurance CFC status (CIGNA APAC Holdings Limited)

CFC 2014/02 applies to CIGNA APAC Holdings Ltd and grants non-attributing active CFC status to the specified insurance CFCs resident in Hong Kong.

Reference

This determination is made under section 91AAQ of the Tax Administration Act 1994

This power has been delegated by the Commissioner of Inland Revenue to the position of Investigations Manager under section 7 of the Tax Administration Act 1994.

Explanation (which does not form part of the determination)

Under sections CQ 2(1)(h) and DN 2(1)(h) of the Income Tax Act 2007, subject to sections CQ 2(2B) and DN 2(2), no attributed CFC income or loss arises from a CFC that is a non-attributing active CFC under section EX 21B of the Income Tax Act 2007.

Section EX 21B(3) of the Income Tax Act 2007 provides that a CFC that is an insurer meeting the requirements of a determination made by the Commissioner under section 91AAQ of the Tax Administration Act 1994 is a non-attributing active CFC. In the absence of such a determination, a CFC carrying on an insurance business is unlikely to be a non-attributing active CFC, because insurance income is otherwise treated as passive income and an attributable CFC amount by section EX 20B(3) of the Income Tax Act 2007.

Section 91AAQ(1)(b) of the Tax Administration Act 1994 allows a person to apply to the Commissioner for such a determination in respect of the members of a group of CFCs, if the members satisfy subsection (3). CIGNA APAC Holdings Limited has made application in respect of the members of the group of CFCs set out below.

It has been determined, having regard to the matters set out in subsections (4) and (5) of section 91AAQ of the Tax Administration Act 1994, that the members of the group of CFCs satisfy the requirements set out in section 91AAQ(3) of the Tax Administration Act 1994 and are accordingly non-attributing active CFCs for the purposes of section EX 21B of the Income Tax Act 2007.

Scope of determination

The CFCs to which this determination applies is:

Name Jurisdiction
CIGNA Hong Kong Holdings Company Limited Hong Kong
CIGNA Worldwide Life Insurance Company Limited Hong Kong
CIGNA Worldwide General Insurance Company Limited Hong Kong

Interpretation

In this document, unless the context otherwise requires:

"Attributed CFC income or loss" means attributed CFC income under section CQ 2 or attributed CFC loss under section DN 2 of the Income Tax Act 2007.

"CFC" means a CFC as defined in section YA 1 of the Income Tax Act 2007.

"Non-attributing active CFC" means a non-attributing active CFC under section EX 21B of the Income Tax Act 2007.

Conditions stipulated by the Commissioner

This determination is made subject to the following condition:

  • That for the 2013-14 and 2014-15 income years, the business of the group of CFCs is continuously producing income, other than income from claims under reinsurance contracts, that is all or nearly all from:
    • premiums from insurance contracts, other than reinsurance contracts, covering risks arising in Hong Kong; and/or
    • proceeds from investment assets having a total value commensurate with the value of those insurance contracts.

Determination

Pursuant to section 91AAQ of the Tax Administration Act 1994 I hereby determine that the above CFCs are non-attributing active CFCs for the purposes of section EX 21B of the Income Tax Act 2007.

Application date

This determination applies for the 2012-13 to 2014-15 income years.

This determination is signed by me this 10th day of February 2014.

Bill Acton
Investigations Manager