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Q:
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What are the types of TRCs?
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A:
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There are two types of TRCs in Hong Kong, which are the ordinary TRCs and TRCs for “Conditional Standover Order”. Ordinary TRCs are introduced to assist taxpayers to build up funds for tax payment and are issued in electronic form. While TRCs for “Conditional Standover Order” are a form of security, which taxpayers are required to provide for the payment of tax held over upon objections or appeals against assessments. Such TRCs are issued only in paper form.
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Q:
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How can I use the service of ordinary TRCs?
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A:
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‘You need to furnish a relevant application form in respect of opening a TRC account in hardcopy to IRD. After processing your application, you will receive your TRC Account Number (TAN) wherein you can purchase and redeem electronic TRCs. Each taxpayer can only open one TRC account and it is not allowed to be opened jointly.
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Q:
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What are the TRCs for “Conditional Standover Order”?
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A:
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When an assessment is under objection, the Commissioner may order the tax in dispute be held over conditionally upon purchase of a TRC. The TRC can be issued in whatever amount specified by the Commissioner and it can only be used to settle the tax due on the assessment in dispute or repaid to the taxpayer depending on the final determination of the objection or appeal.
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Q:
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How can I purchase TRCs?
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A:
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With a TRC account, you may purchase ordinary TRCs monthly through bank autopay, or at any time via a telephone, the Internet, a bank automated teller machine, by post or in person. The ordinary TRCs so purchased will be deposited into your TRC account. While upon receipt of the TRCs for “Conditional Standover Order”, you can only purchase such TRCs by post and in person only.
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Q:
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Can I earn interest from purchasing ordinary TRCs?
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A:
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Yes, you can. But please note that interest rate on TRCs is reviewed every month. Effective from 1 June 2020, the interest rate on ordinary TRCs is 0.2% per annum. But such interest payable on the said TRCs is governed by the following rules:-
The TRC will earn interest only when used for payment of the holder’s tax.
Once purchased, the TRC will bear the interest rate prevailing at the date of purchase.
The TRC will bear simple interest which is calculated from the date of purchase to the date of redemption.
The TRC will earn interest for a maximum period of 36 months.
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FAQ
