MPF System

Voluntary Contributions / Tax Deductible Voluntary Contributions (TVC)

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TVC is the only type of voluntary contributions that is entitled to tax deduction. Account holders can enjoy tax deductions under salaries tax or tax under personal assessment.

In the 2019-20 year of assessment and each subsequent year of assessment, the tax deductible limit per year is $60,000, which is an aggregate limit for both TVC and qualifying deferred annuity policies (QDAP) premiums.

If the account holder has made TVC and paid premiums for QDAP in the same year of assessment, tax deduction will be applied to the TVC first. Any remaining amount will then be used for tax deduction on QDAP premiums.

*Only premiums paid for QDAPs which comply with the guidelines issued by the Insurance Authority will be eligible for tax deduction.

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

(a) holders of contribution accounts or personal accounts of MPF schemes
(b) members of MPF Exempted ORSO Schemes

Convenient
Eligible persons are free to choose an MPF scheme which offers TVC accounts. They can open a TVC account and make contributions to the trustee directly.

Transparent
MPF trustees will provide contribution summaries to scheme members annually to facilitate the filing of tax returns.

Flexible
Scheme members can make contributions of varying amounts at irregular intervals. They can increase or reduce the amount of contributions, or they can suspend or resume making contributions at any time to suit their personal circumstances.

Simple
TVC account holders can transfer the whole balance of a TVC account to the TVC account of another MPF scheme at any time.

Most MPF schemes offer TVC accounts. Eligible persons can open TVC accounts in any MPF schemes which offer such accounts and make contributions directly to the MPF schemes without involving their employers. For information on MPF schemes which offer TVC accounts, please refer to the Trustee Service Comparative Platform on the MPFA's website.

Every year, trustees* will provide a contribution summary to scheme members. The summary indicates the amount of TVC made in an assessment year, which would facilitate the filing of tax returns by scheme members.

* MPF trustees and their schemes will get onboard the eMPF Platform in sequence one by one. When the scheme has got onboard to the Platform, eMPF Company will utilize the eMPF Platform to perform the administration of the scheme, provide scheme administration services to employer, scheme member and self-employed person and handle the service instructions. From then on, employer, scheme member and self-employed person can manage your MPF on the eMPF Platform and should no longer submit service instructions to MPF trustee; the eMPF Platform will provide the relevant information and/or documents to you directly. Please visit eMPF Website (www.empf.org.hk) for the onboarding timeline of MPF scheme(s) and the relevant information.

The following examples illustrate the tax savings of single taxpayers with different income levels (based on the tax rate of 2018-19 assessment year):

Tax Saving Each Year

^#The tax-deductible limit is $60,000 for the 2019-20 year of assessment. The amount is an aggregate limit for both TVC and QDAP premiums paid during the relevant year of assessment.

^#The examples above are based on the following assumptions: the taxpayers are only entitled to basic allowance and tax deductions from mandatory contributions, and 10% of their annual income is used to make TVC.

^# These examples are for illustration and reference only. The actual amount saved depends on many factors, including personal income, entitled tax allowances and deductions, as well as the premiums paid for QDAP or the amount of TVC made, etc.

The contributions made into a TVC account, whether tax-deductible or not, can only be withdrawn when the scheme member reaches the age of 65 (except for statutory grounds for early withdrawal).

The whole balance of a TVC account can be transferred to the TVC account of the same member under another MPF scheme at any time.