Qualifying Debt Instruments

Currently, a concessionary profits tax rate at 50 per cent of the normal rate is applied to the interest income and profits derived from qualifying debt instruments with a maturity period of less than seven years but not less than three years. The Financial Secretary proposed to extend this concession to cover qualifying debt instruments with a maturity period of less than three years.

Further, to better meet market requirements, the Financial Secretary also planned to amend the provisions under the Inland Revenue Ordinance (“IRO”) that require such qualifying debt instruments to be issued to the public in Hong Kong.

The IRO will be amended to take forward the two proposals. The Government will table the relevant Amendment Bill to the Legislative Council as soon as possible. The above proposals will take effect upon the enactment of the law amendments.