If the income from property charged to Property Tax is included in the taxpayer's profits for Profits Tax purposes, or if the property is occupied by the taxpayer for business purposes, the amount of Property Tax paid may be deducted from the amount of Profits Tax assessed. Corporations carrying on a trade, profession or business in the Colony are exempted from paying the Property Tax which would otherwise be set off against their profits.
8. INTEREST TAX.
Interest Tax is charged on interest arising in the Colony, but is deducted at source and collected from the person paying the interest. The tax is paid on interest arising in or accruing in the Colony, if paid or payable under a mortgage, debenture, bill of sale, deposit, loan, advance or other indebtedness whether evidenced in writing or not.
The full Standard Rate of 15 per cent is assessed on gross revenue from interest. There are, however, certain exemptions, such as :—
(1) Interest payable to a licensed bank or to a corporation carrying
on a business in the Colony.
(2) Interest at a rate not exceeding three per cent annually paid
by a licensed bank or by the Government.
(3) Interest paid on Tax Reserve Certificates.
Interest Tax is also chargeable on that part of any annuity payable in Hong Kong which is not a return of capital. The interest element is calculated in accordance with a prescribed table.
9. TAX RESERVE CERTIFICATES.
Tax Reserve Certificates bearing simple interest at 4.2 per cent per annum can be purchased in multiples of $50 and will be accepted by the Inland Revenue Department in payment of any taxes due. They can be exchanged for cash at any time, but no interest will be payable on Certificates not used for the payment of tax. They may be purchased in any quantity and there is no limitation on the length of time for which they may be held; however, not more than three years' interest will be paid.
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