Inland Revenue Department launches “Tax Reserve Certificate Scheme” to pay tax and earn interest! The interest period is 3 years, and the annual interest rate is higher than that of bank demand deposits

An estimated 2.47 million salary tax returns are expected this year, which were mailed on June 1, and taxpayers are required to complete and submit their returns on or before July 2. If you are not ready to file your tax returns, you can consider the “Tax Savings Coupon Program” established by the government. In addition to the “Automatic Tax Payment” service to ensure that you can pay taxes on time, there is also a savings function. The current plan is the latest annual rate The interest rate was raised to 0.13%, which is higher than the demand deposit rate of the major banks. This article will sort out the details of the “Tax Savings Voucher Scheme” for the reference of interested taxpayers:

What is the interest rate for tax credits, etc.?

The interest rate of tax reserve certificates refers to the average interest rate of 12-month time deposits of the three note-issuing banks and is reviewed every month. The interest rate will also be adjusted regularly according to the trend of market interest rates.

Recently, the Government Gazette announced that the Secretary for Financial Services and the Treasury has authorized the adjustment of the interest rate of the interest payable on the tax reserve certificates. Starting from June 6 this year, the annual interest rate of the tax reserve certificates will be adjusted from the previous 0.05%. It rose to 0.1333%, that is, for every 100 Hong Kong dollars purchased, the interest earned was 0.0111 Hong Kong dollars, which was higher than the current deposit interest rate of most banks.

How to buy tax storage vouchers?

The Tax Reserve Certificate scheme launched by the Inland Revenue Department helps taxpayers to save money while handling their taxes. If you are interested in the TRC scheme, taxpayers can first understand the contents of the scheme and open an account to purchase TRCs through bank automatic transfer, telephone, Internet, bank ATM, postal delivery, etc. with a fixed monthly fee, and it will be automatically credited to your Tax Reserve Certificates account.

General taxpayers can participate in the “Electronic Tax Reserve Certificate Scheme”; while serving and retired civil servants can voluntarily participate in the “Earn-As-You-Save” Scheme:

“Electronic Tax Reserve Certificate Scheme”

If you want to participate in the “Electronic Tax Reserve Certificate Scheme”, the taxpayer needs to complete the “Tax Reserve Certificate Account” application form (IR1306) and return it to the Inland Revenue Department for account opening. Once the account is opened, you can use the account number of the account. Purchase or redeem electronic tax reserve certificates. Each taxpayer is only allowed to open one tax reserve certificate account, and it cannot be opened jointly.

After opening a tax reserve certificate account, taxpayers can purchase a fixed monthly amount of tax reserve certificates with a face value of at least RMB 300 and multiples of RMB 50. If the tax reserve certificate is used to clear the holder’s tax, interest can be obtained.

“Earn and Save” Plan

As for the “Earn-As-You-Save” scheme specially designed for civil servants, interested participants can submit an Authorization Form (General Form No. 605) within one month of the effective month to authorize the Director of Accounting Services to deduct monthly deductions from salaries or pensions A specified amount (same as RMB 300 or above and in multiples of RMB 50) is used to purchase tax reserve certificates, such as the form of “grain deduction” for tax storage.

Precautions for purchasing tax reserve certificates.

It should be noted that the Tax Reserve Certificate Scheme is only valid for the holder’s tax and can only be used to pay their own tax and can earn related interest at the same time.

In addition, although the interest rate of the tax reserve certificate will be adjusted periodically, if the taxpayer purchases the tax reserve certificate, the interest rate will remain unchanged at the interest rate effective on the date of purchase.

For the interest generation of TRCs, the maximum interest period is 36 months. If the interest is calculated based on a single interest, the interest will be from the date of purchase to the date of tax payment for the redemption of TRCs.

Once the taxpayer wants to get back the principal in the TRC account, you need to submit the relevant redemption form to the Inland Revenue Department. Also, if the TRC is not used to settle your own taxes, you will not earn any interest on the principal redeemed.

The above information is for reference only. If you have any questions about tax declaration and accounting, we welcome your inquiries.