Tax Deductible Voluntary Contributions

Tax deductible, extra savings, an all-round investment

What is TVC?

Tax Deductible Voluntary Contributions(TVC) is a new type of contributions under the MPF system. Members with contribution accounts or personal accounts of MPF schemes, or members of MPF Exempted ORSO schemes are all eligible to make TVC. Scheme members can open a TVC account under an MPF scheme of their own choice and make TVC directly to the account without going through the employers. Only contributions made to TVC accounts not exceeding the tax deduction cap are tax deductible. Other types of MPF voluntary contributions are not tax deductible.

Scheme members can enjoy the flexibility to make TVC to their TVC accounts at any time and in varying amounts. They can also increase or reduce the amount of contributions, or cease to make contributions, or resume the making of contributions at any time, having regard to their personal circumstances. However, same as the MPF mandatory contributions, TVC has to be preserved until the age of 65 (unless exempted on other statutory grounds).

The tax deductions, allowable under salaries tax or personal assessment, is subject to a cap of HK$60,000 per year. Depending on your TVC amount, based on the prevailing highest tax rate (i.e. 17%), the maximum tax savings can reach HK$10,200.

Source: Investor and Financial Education Council
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TVC is voluntary in nature, employer involvement is not required ;

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To be eligible for tax concession, your TVC must be paid into a TVC account of an MPF scheme ;

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TVC account is independent from the MPF contribution account or MPF personal account ;

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In your TVC account, you may make your own fund selection according to your risk appetite, or choose to invest in Default Investment Strategy (DIS) ;

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You may transfer the accrued benefits derived from TVC to another MPF scheme which offers TVC at any time ;

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Each eligible person can only have one TVC account under an MPF scheme ;

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TVC is subject to the same vesting, preservation and withdrawal restrictions applicable to MPF mandatory contribution ;

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A TVC account holder can only withdraw benefits from the TVC account upon reaching the age of 65 or on other statutory grounds.

Benefits of TVC

Depending on your TVC amount, you may enjoy up to HK$10,200 tax concession. You will not be charged on subscription fee nor is there a maximum contribution amount. The minimum contribution with Principal MPF S800 Scheme is HK$300 per month or an annual lump sum of HK$3,000.

MPF allows you to have a wide choice of professionally-managed investments, and the flexibility to diversify your portfolio to reduce investment risks. Managing your TVC under your existing MPF account may also help you save time and administrative cost.

TVC Tax Deduction Calculator

The tax deductions, allowable under salaries tax or personal assessment, is subject to a cap of HK$60,000 per year. Depending on your TVC amount, based on the prevailing highest tax rate (i.e. 17%), the maximum tax savings can reach HK$10,200

Calculate
Asset Management

Case scenario

Examples of salary tax computation resulting from MPF Voluntary Contributions (VC) and Tax Deductible Voluntary Contributions (TVC).

Additional Important Information

Source: www.gov.hk/en/residents/taxes/salaries/allowances/allowances/7years.htm 

Note: all figures in the above example are calculated in HK dollars. Example is for reference only and does not constitute any form of advice.

Investment involves risk. You should consider your own risk tolerance level and financial circumstances before making any investment choices.

1. For ease of calculation, the employee MPF MC is taken to be 5% of the employee’s monthly income, with a monthly maximum contribution limit set at HK$1,500.

2. For ease of calculation, TVC is taken to be 5% of the employee’s monthly income.

3. To enjoy maximum tax concession of HK$10,200, TVC is taken to be maximum tax-deductible limit of HK$60,000.

Comparison of Tax Deductible Voluntary Contributions, Mandatory Contributions and Special Voluntary Contributions

1. A maximum of HK$60,000 is tax deductible under salaries tax and personal assessment per year.

2. A maximum of HK$18,000 is tax deductible under salaries tax, personal assessment and profits tax (for self-employed) per year.

3. The Employee Choice Arrangement (ECA) gives employees greater autonomy, allowing them to, once a year, opt to transfer the accrued benefits derived from the employee mandatory contributions in their contribution accounts to a scheme of their own choice.

4. Withdrawal of TVC accrued benefits must meet any of the following requirements: retirement (attaining the age of 65); early retirement (attaining the age of 60 and ceased all employment or self-employment with no intention of becoming employed or self-employed again); death; small balances; permanent departure from Hong Kong Special Administrative Region; total incapacity; or terminal illness.

5. Please refer to relevant MPF scheme brochure.

6. AUM stands for Asset Under Management.

Application Forms

Useful Forms & Document Downloads

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Change in investment form by member
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Change of member particulars
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Scheme member's request for fund transfer
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MPF Scheme Brochure
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TVC Campaign Leaflet
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FAQ

TVC

What is Tax Deductible Voluntary Contribution (TVC)? 

TVC is a simple, convenient and flexible arrangement for retirement savings. Eligible persons can open TVC accounts in any MPF schemes which offer such accounts and make contributions directly to the accounts.

Who are eligible to make TVC? 

The following persons are eligible to open a TVC account in an MPF scheme:

 

  1. Holders of contribution accounts or personal accounts of MPF schemes; or
  2. Members of MPF Exempted ORSO Schemes.
How can I benefit from the tax concessions? 

You can open a TVC account and make contributions directly to the account. You can then enjoy tax deduction under salaries tax or tax under personal assessment for your TVC.

 

The maximum tax deduction cap per year is $60,000, which is an aggregate limit for TVC and qualifying deferred annuity policies premiums.

 

If you have more than one TVC account, the maximum tax deduction cap applies to the total amount of contributions of all of your TVC accounts.

 

To facilitate your filing of tax return, MPF trustee will provide a TVC contribution summary to you each year.

When will the tax deductions become effective? 

Tax concessions on TVC starts from 1 April 2019. You can claim deductions when you fill in the tax return for the year of assessment 2019/20 for your TVC made from 1 April 2019 to 31 March 2020.

Will the tax deductions for mandatory contributions be affected after the implementation of TVC? 

The current tax deductions for mandatory contributions will not be affected by the implementation of TVC.

Will all MPF schemes offer TVC accounts? 

Majority of the master trust schemes would offer TVC accounts. You can call MPFA hotline 2918 0102 or refer to Trustee Service Comparative Platform in the MPFA’s website (www.mpfa.org.hk) to check the MPF schemes which offer TVC accounts from 1 April 2019.

Can I transfer my TVC to other MPF schemes? 

You can transfer all balance in a TVC account to another TVC account under a different scheme at any time.

 

If you wish to transfer the balance in a TVC account to another MPF scheme, all you need to do is to fill in the "Scheme Member's Request for Transfer of TVC" (Form MPF(S)-P(T)) and then send it to your new scheme trustee. The form can be obtained from your trustee or downloaded from MPFA’s website.

How can I withdraw my TVC? 

To meet the purpose of encouraging extra savings for retirement, TVC will be subject to preservation requirements. You can only withdraw TVC account balance upon reaching 65 years of age, or on other statutory grounds. Contributions exceeding the tax deduction cap cannot be withdrawn early either.

 

Withdrawal arrangement of TVC is the same as that of other MPF contributions. You should submit the completed claim form to your MPF trustee and provide the supporting documents required.

I am currently making voluntary contributions. Will the contributions become tax deductible automatically? 

If you wish to benefit from tax deductions under salaries tax or personal assessment, you must put the TVC in a TVC account. Your voluntary contributions made to your existing contribution account are not TVC and such contributions are not tax deductible.

Can I have more than one TVC account? 

You can only have one TVC account in an MPF scheme, but you may have more than one TVC account in more than one MPF scheme.

How will the TVC be invested? 

Similar to other types of contributions, you have the right to choose the constituent funds offered by the MPF scheme. If you have not given any investment instructions, your TVC will be invested according to the Default Investment Strategy.

Source: MPFA
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