Banker's Undertaking

The proviso to section 71(2) of the Inland Revenue Ordinance empowers the Commissioner, when considering a valid objection, to order tax to be held over on the condition that a tax reserve certificate is to be purchased, or a banker's undertaking is to be furnished, to provide security for payment of the tax to be held over.

Prior approval of the Inland Revenue Department has to be sought in case a banker's undertaking is to be furnished in lieu of purchasing a tax reserve certificate. Upon approval for provision of a banker's undertaking, a copy of the banker's undertaking form incorporating details of the tax to be held over will be forwarded to the taxpayer together with the approval letter.

A banker's undertaking to be furnished pursuant to section 71(2) proviso (b) of the Inland Revenue Ordinance must be in a form acceptable to the Commissioner [section 71(9) of the Ordinance]. The usual format which is acceptable to the Commissioner is appended below for general information. It is not intended to be downloaded for completion purpose. Any enquiries regarding any particular case should be addressed to the case assessor directly.

Please note that section 71(9)(e)(ii) of the Inland Revenue Ordinance explicitly provides that the undertaking should cover the payment of interest on the amount of the tax held over. The interest payable is the amount of interest accruing from the due date as stated on the notice of assessment to the date of withdrawal or final determination of the objection or appeal. The applicable interest rate is provided under section 71(11) of the Inland Revenue Ordinance. It is the rate fixed by the Chief Justice by notice in the Gazette under section 50 of the District Court Ordinance (Cap. 336).

For further information about objections and appeals, please see Objections & Appeals, Payment of Tax in Dispute & Interest on Tax Held-over.

For further information about interest rate fixed under section 50 of the District Court Ordinance (Cap. 336), please see Judgment Interest Rate.

For Information Only
Not to be Downloaded for
completion purpose

Undertaking to Commissioner of Inland Revenue under section 71(9)
of the Inland Revenue Ordinance (Cap.112)

File No. : XXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXX

Date : XXXXXXXXXXXXXXXXXXXXXXX

To :

The Commissioner of Inland Revenue,

G.P.O. Box 132

Hong Kong.

Whereas a valid notice of objection has been lodged by XXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX of XXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXX (hereinafter referred to as "the taxpayer") against the Notice of Assessment and Demand for XXXXXXXXXXXXXXXXXXXXXX Tax for the Year of Assessment XXXXXXXXXXXXXXXXXXXXXX in the sum of $XXXXXXXXXXXXXXXXXXXXXXXX under Charge No. XXXXXXXXXXXXXXXXXXXXXXXX due and payable on or before XXXXXXXXXXXXXXXXXXXXXX.

Whereas you have agreed that you will order that the payment of $XXXXXXXXXXXXXX (the tax debt) be held over pending the determination of such objection and of any subsequent appeal on condition that the taxpayer provides security for the payment of the tax debt by furnishing a banker's undertaking in the following terms.

Then in consideration of the said order and upon receipt of your written notification that the objection or appeal has been withdrawn or finally determined, we, XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX of XXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX hereby undertake to pay you the amount of the tax debt or such other tax as may then be due and payable together with interest thereon from the date for payment of the tax specified in the notice of assessment to the date of withdrawal or final determination of the objection or appeal at the rate specified in section 71(11) of the Inland Revenue Ordinance (Cap. 112).

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For Information Only
Not to be Downloaded for
completion purpose

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Our maximum liability shall not exceed the tax debt and interest thereon at the rate specified as aforesaid.

This undertaking is not transferable or assignable and is not revocable without your consent.

This undertaking is to be governed by and construed in accordance with the laws of Hong Kong.

Upon the expiration of this undertaking or upon the taxpayer's objection or appeal being sustained, this undertaking shall be returned to us for cancellation.

Common Seal of the Bank is hereunto
affixed in the presence of :

)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

)

(Full name of Officer)

)

XXXXXXXXXXXXXXXXX

)

(Signature of Officer)

)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

)

(Hong Kong Identity Card No.)

)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

)

(Full name of Officer)

)

XXXXXXXXXXXXXXXXX

)

(Signature of Officer)

)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

)

(Hong Kong Identity Card No.)

)

Bank Reference : XXXXXXXXXXXXXXXXXXXX