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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority has announced today (August 20) the credit rating requirement applicable to short-term debt instruments for the purpose of qualifying debt instruments for profits tax concession under section 14A of the Inland Revenue Ordinance (IRO).
Under the profits tax concession scheme, interest income and trading profits derived from eligible debt securities are entitled to concessionary tax rates as specified in the relevant section. To be eligible, a debt instrument should, among other criteria, possess a credit rating acceptable to the Monetary Authority (MA) from a rating agency recognised by the MA.
The MA has announced the latest minimum acceptable credit ratings applicable to long-term debt instruments in June 2006. With the newly announced minimum acceptable credit ratings applicable to short-term debt instruments, the minimum credit ratings acceptable to the MA for the purpose of qualifying debt instruments for profits tax concession under section 14A of the IRO are:
Recognised credit Minimum rating required
rating agencies Long-term debt Short-term debt
instrument instrument
Fitch Ratings BBB- F3
Moody's Investors Baa3 P-3
Service
Rating and BBB- a-3
Investment
Information, Inc.
Standard and Poor's BBB- A-3
Ratings Services
The MA reserves the right to make adjustments to the list of rating agencies and minimum credit ratings recognised by him.
Ends/Monday, August 20, 2012
Issued at HKT 16:50
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