The Hong Kong Inland Revenue Department announced on 29 November 2024 that starting from 2 December 2024, the new annual rate of interest payable on Tax Reserve Certificates will be 0.5500% against the current rate of 0.7167%; i.e. the new rate will be HKD 0.0458 per month per HKD 100.
Tax Reserve Certificates bear simple interest, and interest is calculated monthly (including part of a month) from the date of purchase to the date of payment of tax. Interest is only credited when certificates are used to pay tax, and no interest is due where the principal value of a certificate is repaid to its holder.
The rate of interest payable on Tax Reserve Certificates is reviewed every month based on the average prevailing interest rate for the 12-month time deposit for HKD 100,000 to HKD 499,999 offered by the three note-issuing banks.
The new rate will apply to all certificates purchased on or after 2 December 2024. Certificates purchased before 2 December 2024, will continue to earn interest at the rates prevailing on their respective purchase dates.
Interest will cease to accrue after 36 months.
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