The "Three Tax-Deductible Treasures" in Hong Kong:
Introduction, Application Strategies and Policy Overview
Hong Kong’s "Three Tax-Deductible Treasures" – Qualified Deferred Annuity Plan (QDAP), Tax-Deductible Voluntary Contributions (TVC) to MPF, and Voluntary Health Insurance Scheme (VHIS) – are tax incentives launched in April 2019 to boost citizens’ retirement and medical protection.
I. QDAP: Long-Term Retirement Savings
5+ year insurance product (certified by HK’s Insurance Authority) with a shared HK$60,000 annual tax deduction limit (HK$120,000 for joint filers). Annuity withdrawals start at 50+. Singles and couples can save taxes via contributions, with eligibility limited to HKID holders (policyholder or spouse).
II. TVC to MPF: Flexible Retirement Investment
Voluntary MPF contributions with flexible amounts/funds, sharing the HK$60,000 deduction limit with QDAP. Withdrawals at 65 or under special conditions. High-income earners and investors can combine TVC with QDAP for tax savings and risk diversification.
III. VHIS: Medical Protection + Tax Benefits
Government-certified medical insurance with HK$8,000 annual deduction per insured (unlimited insureds). Covers broader medical needs, with guaranteed renewal. Families and high-income earners use it for comprehensive protection and tax reduction.
IV. Combined Strategy: Maximize Benefits
Professionals and couples can combine the three tools to optimize tax savings (up to HK$27,200 for some couples) and long-term protection, leveraging joint filing advantages and full deduction limits.
V. Notes & Risks
Allocate QDAP/TVC’s shared limit wisely. Evaluate QDAP’s stability, TVC’s market risks, and VHIS’s coverage. Retain documents and purchase via authorized providers.
VI. Policy Updates
2024/25 offers a one-off 100% salaries tax reduction (capped at HK$1,500). Future policies may relax limits or add products; follow IRD and IA announcements.
Summary
These tools let citizens legally save taxes while enhancing financial security. Tailor combinations to income, risks, and family needs, and consult advisors for long-term alignment.