Learn more about the tax deductions for QDAP and TVC

QDAP / TVC
Tax filing
Tax deductions
Provide tax incentives to encourage the public to save early for retirement
Qualifying deferred annuity policies (QDAP) – For relevant premiums to qualify for tax deductions, a deferred annuity product must comply with the criteria set out in the guideline (including product design and information disclosure) issued by the Insurance Authority. Learn more.

Tax deductible MPF voluntary contributions (TVC) - scheme members can open a TVC account under an MPF scheme of their own choice. Only contributions made to TVC accounts are tax deductible.
The tax deductions, allowable under salaries tax or personal assessment, is subject to a cap of $60,000 per year. It is an aggregate limit for both qualifying deferred annuity premiums and TVC.
The actual tax savings depend on personal income level, entitled tax allowances and deductions as well as the amounts of qualifying deferred annuity premiums paid or the amounts of TVC made. Based on the prevailing highest tax rate (i.e. 17%), the maximum tax savings can reach $10,200.
A married couple is allowed to allocate tax deductions for qualifying deferred annuity premiums amongst themselves in order to claim the total deductions of $120,000, provided that the husband and the wife are both taxpayers, and the deductions claimed by each taxpayer does not exceed the individual limit. A taxpayer is allowed to claim tax deductions for qualifying deferred annuity premiums paid for QDAP covering the couple as joint annuitants, or either the taxpayer or the taxpayer’s spouse as a sole annuitant. Learn more
From 1 April 2019 onwards, the public can start purchasing QDAP or opening a TVC account to make contributions.
The tax deduction measures will be effective from the year of assessment 2019/20. Taxpayers can claim the relevant deductions when they file the “Tax Return – Individuals” for the year of assessment 2019/20.

Note: The relevant provisions in the Inland Revenue Ordinance (Cap. 112) must be fulfilled.

 

10 April 2019