Do you want to save more by saving on tax?


^Assuming a taxpayer has a VHIS policy he or she could enjoy a maximum tax-deductible premium of HK$8,000 per eligible insured person per tax assessment year. As of April 1, 2019, the aggregate maximum tax-deductible limit for both qualifying deferred annuity premiums and Tax Deductible Voluntary Contributions is HK$60,000 per taxpayer per year. The actual amount of tax saved varies according to each taxpayer’s taxable income and the applicable tax rate.
Get more of your family members insured for the chance to save more!
Whether you are taking up a VHIS policy for yourself or a family member, it’s eligible for tax deduction of up to HK$8,000* per insured person per tax assessment year, with no limits on the number of insured persons! Learn more about tax deduction More on Manulife's VHIS
*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.
Get a monthly income to enjoy a tax break!
Take up a QDAP certified by the Insurance Authority, and you can apply for tax deduction for the basic plan premiums you paid. If you and your spouse have each purchased a QDAP, the two of you could save up to HK$20,400* in tax per year! Learn more about tax deduction More on Manulife QDAP
*Assuming both husband and wife are taxpayers, the applicable tax rate is 17% and the total combined qualifying deferred annuity premiums they have paid during the 2019/2020 tax assessment year is HK$120,000. The actual amount of tax saved varies according to individual circumstances and may be different from the amount cited above. For details, please consult independent tax and accounting consultants.
Save more for retirement, save more on tax!
Through TVC, you may not only boost your retirement reserves but enjoy up to HK$10,200* in tax savings! Learn more about tax deduction More on Manulife MPF TVC
*The maximum total tax deductible amount from both TVC and QDAP is HK$60,000 per tax assessment year. The actual amount of tax saved varies according to a taxpayer’s personal income, tax deductible amount, tax allowances, and the premiums paid for QDAP and contributions made for TVC. Based on the current peak tax rate of 17%, up to HK$10,200 in tax can saved per year.

Tax Deductible Case Studies

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 HK$420,000. 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 HK$60,000 each year to these two plans.

Mandy and her husband Marven are always so occupied with work that they won’t miss any chance to relax and unwind on holidays abroad. They spend about HK$120,000 each year on travel alone. As they don't want kids in their lives and don't have to financially support their parents, they are in a position to spend what they earn on themselves. In recent years, they have become increasingly concerned about the quality of life they can enjoy after retirement. The concern came as a result of their frequent contact, due to their jobs, with frail and infirm elderly people, whose declining health and financial vulnerability have left the couple worried about whether they can achieve the retirement life they want.

As a result, even though they already have group health coverage from their employers, they have each decided to take up a private health insurance plan with multiple benefits, which they hope will become their safety nets against potential medical expenses as they grow older. After doing some research, they concluded that the Flexi Plans launched under the Voluntary Hospital Insurance Scheme (VHIS), which offer protection tailored to their needs as well as tax deduction benefits, were a good fit for them.

The couple have a passive interest in managing their finances, and hold what remains of their income after expenses mostly in the form of bank savings. Mandy plans to retire in ten years’ time and would like to have a stable income during the first 10 to 20 years of her retirement, when they are about 50 to 70 years old. That’s why she has decided to buy a Qualifying Deferred Annuity Product (QDAP) to help her save more and enjoy tax benefits. Meanwhile, Marven expects to be working until age 65 and prefers a retirement savings plan that provides more investment options. That's why he has chosen the Tax Deductible Voluntary Contributions (TVC) option. They will each contribute HK$100,000 a year to their respective insurance plans for a period of 5 years, which will be funded by their cash savings.

Mr. Man, the major breadwinner of his family, is a manager at a logistics firm, and his wife works for a fast food shop as an accounting clerk. The couple live together with Man’s 65-year-old mother, who helps look after their 10-year-old son.

As the flat where they live was purchased 20 years ago through the Home Ownership Scheme and the mortgage has already been paid off, Man’s financial obligations are not too heavy. However, he is concerned about not being able to cope with rising medical costs in the future since his mother’s health is showing signs of decline. Other than the group medical insurance provided by his employer, the family doesn’t have any medical protection.

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Learn more about tax deduction
What is tax deduction under VHIS ?
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.
What is the definition of 'specified relatives'?
Specified dependents include the taxpayer’s spouse and children, and the grandparents, parents, brothers or sisters of the taxpayer or his/ her spouse. Please refer to Section 112 of the Tax Ordinance for the detailed definition.
How to estimate the tax savings from purchasing VHIS certified plan?
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 VHIS Office of Food and Health Bureau and the Inland Revenue Department.
What is the insurance product category of VHIS?
VHIS is an individual indemnity hospital insurance product, which provides reimbursements of medical expenses.
What are the plan options available under VHIS?
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.
What is TVC?
Tax Deductible Voluntary Contributions (TVC) is a new type of voluntary contributions which are tax-deductible under the MPF system. Members are free to choose their own MPF scheme to set up their TVC account and make contributions directly without involvement of employers.
What is a QDAP?
Qualifying Deferred Annuity Policy (QDAP) is a deferred annuity product complying with the guidelines issued by the Insurance Authority (IA) and being certified by the IA. Premiums paid to QDAP are tax-deductible. QDAP must comply with a number of requirement including but not limited to: the minimum total premiums of HK$180,000, a minimum payment period of 5 years and annuitization at the age of 50 or above. Please click here for more details.
What is maximum tax-deductible amount for both TVC and QDAP?
Premiums paid to QDAP or making MPF TVC (TVC) for retirement purpose are eligible for tax deduction. The aggregate maximum tax-deductible amount for both qualifying deferred annuity premiums and TVC is HK$60,000 per taxpayer per year. The amount of tax deduction will depend on a number of factors, including personal income, entitled tax allowances and deductions, premiums paid to QDAP or TVC made, etc. Based on the highest tax rate for the year of assessment 2018/19 (i.e. 17%), the maximum tax savings can reach up to HK$10,200 per year.
When will tax deduction be effective? When can I start claiming the deductions?
Tax deduction will come into effect from the year of assessment 2019/20. You can report the amount of premiums paid to QDAP and contributions made for TVC from April 1, 2019 to March 31, 2020 when you file the tax return in 2020.
How do I find out the amount of premium paid to QDAP and the amount of TVC made to MPF trustee?
For QDAP, the supporting documents should show the amount of qualifying deferred annuity premiums paid during the year of assessment (e.g. the annual summary or premium payment record issued by insurance companies). For TVC, MPF trustee is required to provide a TVC summary to each TVC account holder within 40 days from the end of a fiscal year (i.e. 10th of May each year), to assist the scheme members to report the amount of TVC when filing their tax return.
When can I withdraw the accrued benefits from my TVC account?
Same as that with mandatory contributions, any accrued benefits derived from TVC are required to preserve and can only be withdrawn upon TVC account holder reaches the age of 65 (except for other statutory grounds under the MPF regulations).
Do I need to open another MPF account for TVC?
You need to open a TVC account.