1 Assuming a taxpayer has a VHIS policy he or she could enjoy a maximum tax-deductible premium of HKD8,000 per eligible insured person per tax assessment year. The aggregate maximum tax-deductible limit for both qualifying deferred annuity premiums and Tax Deductible Voluntary Contributions is HKD60,000 per taxpayer per year. The actual amount of tax saved varies according to each taxpayer’s taxable income and the applicable tax rate.
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Whether you are taking up a VHIS policy for yourself or a family member, it’s eligible for tax deduction of up to HKD8,000* per insured person per tax assessment year, with no limits on the number of insured persons!
*The actual amount saved varies according to each insured person’s personal tax assessment and individual circumstances. For details, please consult independent tax and accounting consultants.
Melissa quit her 9-to-8 job three years ago to follow her dreams in France where she learnt how to make desserts. She is now an instructor at a cooking school in Hong Kong, teaching interest classes in dessert-making. Since she knows how to promote her skills on social media, Melissa is often invited by companies to teach dessert-making classes. Her income therefore depends on how many classes she teaches. While her hands could be tied if there are too many classes, there is invariably downtime when she just ends up staying idle at home.
Despite an unstable income, Melissa is satisfied with what she earns – an average annual income of HKD420,000. Given the limits of her group life policies, she is concerned about her health coverage for emergencies such as sudden illnesses or accidents. That's why she decides to take up a certified plan under the Voluntary Health Insurance Scheme (VHIS). As she is single, she understands that the earlier she starts retirement planning, the better she can prepare for her golden years. She also understands it’s necessary to save more for retirement as long as she has a decent income.
Given the unstable nature of her income, she splits the money she wants to save between a Qualifying Deferred Annuity Policy (QDAP) and a Tax Deductible Voluntary Contributions (TVC) account, allocating a total of HKD60,000 each year to these two plans.
|Equities and Funds||320,000|
|MPF Accrued Benefits||350,000|
|Annual Personal Income||420,000|
|Annual Salary Tax Payable# (Originally)||27,900|
|Tax Deduction for VHIS Plan@||(7,479)|
|Tax Deduction for TVC / QDAP Premiums||(60,000)|
|Tax Payable (Now)#||16,428|
|Annual Tax Savings||11,472|
VHIS is a policy initiative introduced by the Food and Health Bureau. Citizens may apply for tax deduction on the qualifying premiums paid by a citizen for himself/herself and his/her specified dependent(s) (i.e. specificed relatives) for VHIS certified plans on or after April 1, 2019. The deduction ceiling is set at HK$8,000 per insured person per year. There is no cap on the number of dependent(s) that are eligible for tax deduction. For example, if you purchase 3 VHIS plans for 3 dependents, you can apply for tax deduction for the premiums paid up to HK$24,000 (HK$8,000 x 3) per year.
Tax savings from purchasing VHIS certified plan depend on the eligible premiums paid and tax rate like below:
Eligible VHIS certified plan premiums x Tax Rate = Potential Tax Savings
For example, if your premium paid is HK$3,800, assuming the tax rate is 17%, you may possibly enjoy HK$646 in tax savings. But the actual tax savings you can enjoy will depend on your personal tax assessment and situation. For details, please visit the website of and the .
VHIS is an individual indemnity hospital insurance product, which provides reimbursements of medical expenses.
2 types of certified plans are available under VHIS – Standard Plan and Flexi Plan. Standard Plan follows the minimum requirements of VHIS from the Government, providing standardized basic protection. Flexi Plan provides more comprehensive protection and product selection compared with Standard Plan. Manulife offers Manulife Shelter VHIS Standard Plan and Manulife First VHIS Flexi Plan to give you well-rounded protection based on your needs.