Page:Inland Revenue Ordinance, 1947 (Cap. 112).pdf/18

No. 20]

(2) The profits of a company, whether mutual or proprietary, from the business of insurance (other than life insurance) shall be ascertained by taking the gross premiums from insurance business in the Colony (less any premiums returned to the insured and premiums paid on re-insurance) and deducting there from a reserve for unexpired risks at the percentage adopted by the company in relation to its operations as a whole for such risks at the end of the period of which the profits are being ascertained, and adding thereto a reserve similarly calculated for unexpired risks outstanding at the commencement of such period, and from the next amount so arrived at deducting the actual losses (less the amount recovered in respect thereof under re-insurance), the agency expenses in the Colony, and a fair proportion of the expenses of the head office of the company, due account being taken in each case by set-off against such expenses of any income or profits other than premiums.

(3) Where the Commissioner is satisfied that by reason of the limited extent of the business transacted in the Colony by a non-resident insurance company it would be unreasonable to require the company to furnish the particulars necessary for the application of sub-sections (1) and (2), he may, notwithstanding the provisions of those sub-sections, permit the profits of the company to be ascertained by reference to the proportion of the total profits and income of the company corresponding to the proportion which its premiums from insurance business in the Colony bear to its total premiums, or on any other basis which appears to him to be equitable.

(4) For the purposes of this section “investment income of the Life Insurance Fund” means, in the case of a company whose sole business is life insurance, the whole of its income from investments, and, in the case of any other company. such part of its income from investments as appears fairly attributable to its life insurance business.

25. (1) Where a body of persons, whether corporate or unincorporate, carries on a club or similar institution and receives from its members not less than half of its gross receipts on revenue account (including entrance fees and subscriptions), it shall not be deemed to carry on a business; but where less than half of its gross receipts are received from members, the whole of the income from transactions