VHIS is a policy initiative implemented by the Food and Health Bureau (FHB) to regulate individual indemnity hospital insurance products, with voluntary participation by insurance companies and consumers. Under the VHIS, the participating insurance companies offer certified individual indemnity hospital insurance plans ("Certified Plans") for consumers to purchase voluntarily.
You may apply for tax deduction on the qualifying premiums paid for yourself and your specified 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 relative(s) that are eligible for tax deduction. However, please note the Insurance Company may require the insurable interest between the insured person and policyholder. You may use our tax saving calculator to estimate the tax saving amount.
Example:
Mr. Chan purchased VHIS certified plans for himself, his spouse and two children and the premium paid are as follows
| Assume annual premium (HKD) | Amount of premium qualify for tax deduction (HKD) | |
|---|---|---|
| Mr. Chan | $10,000 | $8,000 |
| Spouse | $8,000 | $8,000 |
| Son | $4,000 | $4,000 |
| Daughter | $4,500 | $4,500 |
| Total | $26,500 | $24,500 |
In order to be eligible for claiming tax deduction under VHIS, an insurance policy must meet all the following criteria:
- The policy provides coverage of a Certified Plan under VHIS;
- The policyholder is a personal income taxpayer or his/her spouse;
- The insured person is the policyholder or the policyholder's "specified relatives" and
- The insured person is a Hong Kong resident.
Insurance company should provide a proof of premium payment to the policy holder for claiming tax deduction of Voluntary Health Insurance approved products. Be it the premium receipt or anniversary statement of the policy, the proof of premium payment must clearly state out the information as required by the Inland Revenue Department for tax deductions. Accordingly, Hong Kong Life will issue to the policy holder in every April the「Annual Summary of Voluntary Health Insurance Scheme (VHIS)」which summarizes the total VHIS premium amount paid during that particular assessment year.
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.
Example:
Ms. Wong is entitled to have HKD 8,000 eligible premium amount for tax deduction. Assuming the standard tax rate is 15%, Ms. Wong can enjoy tax deduction as follows
Amount of tax saved = HKD 8,000 x 15% = HKD 1,200
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$180,000, a minimum payment period of 5 years and annuitization at the age of 50 or above. To make it easy for taxpayers to recognize QDAP, the QDAP product brochure will bear a logo for identification.
Policy holder can claim tax concessions on more than one QDAPs as long as the total qualifying annuity premium of all QDAPs does not exceed HK$ 60,000 for individuals.
QDAP are deferred annuity products certified by Hong Kong Insurance Authority which law allow QDAP policyholder (and/or policyholder's spouse) claim tax concessions from their premium paid to QDAP.
No tax deduction for qualifying annuity premiums paid can be allowed to the spouse. Under this circumstance, the maximum amount of deduction allowable to the taxpayer is his/her individual limit which is $60,000, but not $120,000.
Yes, as long as that deductions applied to each taxpayer does not exceed the individual limit of HK$60,000 and the total of tax concessions claimed by you and your spouse not exceeding your own qualifying annuity premiums amount.
Example:
Mrs. Cheng is a housewife with no taxable income. Recently, she purchased a QDAP and paid HKD 65,000 annual premium. Although Mrs. Cheng paid HKD65,000 for her QDAP, Mr. Cheng can only apply for a tax deduction of HKD 60,000 for the coming assessment year.
Disclaimer
Hong Kong Life Insurance based on existing information and our understanding to create the content, Hong Kong Life is not liable for any damage or loss caused through use or misuse of any provided information in the above section. You should consult your own tax and accounting advisors for any tax advice.
Disclaimer
This tax savings calculator adopts Joint Assessment in making estimations for married people and created based on year of assessment 2018/2019 information. This tool is designed to estimate tax saving for the year of assessment 2019/2020 only. This simplified calculator does not include all allowances and deduction items into calculation, therefore, your actual tax saving may vary. All estimations and information provided are for general reference only. The final tax savings amount shall be determined by the HKSAR Inland Revenue Department.
Any data and analysis generated by this calculator is for reference only and does not constitute any offer, solicitation or recommendation to buy any insurance products. You should not make any decision based solely upon the data or analysis provided by this calculator. The results generated by this calculator may be based upon assumptions. They may not cover all personal factors or government policies which would have impact on the results generated from the calculator. We do not provide any tax, legal or accounting advice and consultation to you. If you have any questions, please consult HKSAR Inland Revenue Department or independent tax, legal and accounting consultants. Hong Kong Life makes no representation or warranty of any nature nor takes any responsibility or liability of any kind with respect to the accuracy of the calculation results. You may also seek independent and professional advice before making any decisions.