TAX DEDUCTION FAQ
VHIS, QDAP, TVC — eight tax-deduction questions answered
On this page
- How much can I deduct under VHIS?
- Which taxpayer is eligible to claim?
- Which insured persons does premium-paying qualify for?
- How are QDAP and TVC deducted?
- Are the VHIS pool and the QDAP / TVC pool separate, or shared?
- How do VHIS, QDAP and TVC compare side by side?
- How do I claim, and on which return?
- What if the policy is terminated or the insured changes mid-year?
The Voluntary Health Insurance Scheme (VHIS), Qualifying Deferred Annuity Policy (QDAP) and Tax-Deductible Voluntary Contributions (TVC) form Hong Kong taxpayers’ most-used “tax-deduction trio”. The eight most common questions, answered: how much VHIS deducts, which taxpayer is eligible to claim, which family members count as insured persons, how QDAP and TVC share the HK$60,000 pool, and the maximum total deduction with all three combined.
How much can I deduct under VHIS?
Qualifying premiums paid under a Voluntary Health Insurance Scheme (VHIS) policy are deductible up to HK$8,000 per insured person per year of assessment. The key point is that the cap is calculated per insured person, and there is no limit on the number of insured persons.
For example, if you (the taxpayer) buy VHIS cover for yourself, your spouse, two children, your father and your mother:
- 6 insured persons × HK$8,000 = HK$48,000 deductible.
- Each insured person’s HK$8,000 cap stands alone — they do not share a single combined pool.
- If one insured person’s premium exceeds HK$8,000 (e.g. an older insured carries a higher premium), the excess is non-deductible, but it does not eat into anyone else’s quota.
Note: only premiums paid under a government-certified VHIS plan are deductible. Non-certified supplementary medical insurance (commonly called “non-VHIS supplementary medical”) is outside the deduction. The list of certified plans is published at vhis.gov.hk.
Which taxpayer is eligible to claim?
The IRD’s rule is explicit. To claim the deduction, two conditions must be satisfied at the same time: (1) you must be the policy holder, or the policy holder’s spouse; and (2) you (or your spouse) must have actually paid the qualifying premiums. Both are mandatory.
Four scenarios broken out:
- You are the policy holder and you paid the premium yourself → deductible against your own quota. (The insured person can be anyone — yourself, spouse, child, parent — as long as the insured qualifies as a specified relative.)
- You (the son) buy VHIS for your mother — you are the policy holder, you pay the premium, mother is the insured → you can deduct HK$8,000 per year. This is the standard “buy-for-parent” pattern, fully eligible, provided the mother satisfies the specified-relative conditions for parents (age 55 or over, or eligible to claim a Government Disability Allowance — see Q3).
- Joint assessment couple — the spouse is the policy holder and pays the premium → either spouse can claim, by agreement, but the same premium cannot be deducted twice.
- Mother is the policy holder; the son pays the insurer directly from his own bank account → neither party can deduct. The son is not the policy holder, so he is not eligible. The mother is the policy holder but, in IRD’s view, did not actually pay the premium herself, so she cannot claim either. IRD FAQ Q6 deals with this fact pattern (a sister paying the premium for the taxpayer) and states: “Only the taxpayer as policy holder or his spouse is eligible to lodge deduction claim” — the son’s case follows the same logic. Two clean fixes:
- (a) Add the son as a joint policy holder. Per IRD FAQ Q3, where a single policy has multiple policy holders the qualifying premium is treated as apportioned equally between them, so the son’s share counts towards his own quota.
- (b) The son transfers funds to the mother’s account, and the premium is then paid from the mother’s account. The mother now becomes the actual payer; the paper trail (bank statements, insurer receipts) shows her as payer, and she can claim on her own BIR60 (assuming she has chargeable income to absorb it).
In a sentence: the rule is not “whoever pays gets the deduction”. It is “the policy holder (or his spouse) must have personally paid the premium”. The cleanest practice is therefore: buy for whomever you wish, but make yourself the policy holder and pay from your own account — that way you reliably capture the HK$8,000 quota for that insured person.
Source: IRD “FAQ on Tax Deduction for Qualifying Premiums Paid under the VHIS Policy” — original wording “Only the taxpayer as policy holder or his spouse is eligible to lodge deduction claim.” See citations at the foot of this page.
| Example | Insured | Age | Annual premium payable | Deductible amount ♦ | Tax saved ◇ |
|---|---|---|---|---|---|
| 1a | Taxpayer A | Age 45 | $6,000 | $6,000 | $900 |
| 1b | Taxpayer B | Age 65 | $12,000 | $8,000 | $1,200 |
| Policy holder | Insured | Age | Annual premium payable | Deductible amount ♦ | Tax saved ◇ |
|---|---|---|---|---|---|
| Taxpayer | Taxpayer | Age 40 | $10,000 | $8,000 | $1,200 |
| Spouse | Age 35 | $12,000 | $8,000 | $1,200 | |
| Grandmother | Age 80 | $30,000 | $8,000 | $1,200 | |
| Son | Age 3 | $3,000 | $3,000 | $450 | |
| Daughter | Age 5 | $2,500 | $2,500 | $375 | |
| Total | $57,500 | $29,500 | $4,425 | ||
| Policy | Policy holder | Insured | Annual premium payable | Deductible amount ♦ | Tax saved ◇ |
|---|---|---|---|---|---|
| Policy A | Taxpayer A | Father | $17,000 | $8,000 | $1,200 * |
| Policy B | Taxpayer B (elder brother) | $7,000 | $7,000 | $1,050 * | |
| Total | $24,000 | $15,000 | $2,250 | ||
| Policy | Policy holder | Insured | Annual premium payable | Deductible amount ♦ | Tax saved ◇ |
|---|---|---|---|---|---|
| Policy C | Taxpayer A | Father | $20,000 | $8,000 ⊕ | $1,200 |
| Taxpayer B (elder brother) | $8,000 ⊕ | $1,200 | |||
| Total | $20,000 | $16,000 | $2,400 | ||
Notes
- ♦ The maximum deductible premium per insured person is $8,000 per year of assessment.
- ◇ Computed at the 2018/19 salaries tax / personal assessment standard rate of 15%. The 2018/19 progressive rates are: first $50,000 (2%) / next $50,000 (6%) / next $50,000 (10%) / next $50,000 (14%) / remainder (17%).
- * The taxpayer and his elder brother (also a taxpayer) may each buy a VHIS policy for their father, and each claim a deduction in the same year of assessment.
- ⊕ Where a VHIS policy has more than one policy holder, each policy holder is treated as having paid an equal share of the premium.
Source: Inland Revenue Department.
Which insured persons does premium-paying qualify for?
The IRD calls the eligible insured persons “specified relatives”. The list looks generous, but each relationship comes with an age or status condition — being on the list by name is not enough on its own:
- The taxpayer him- or herself (no age condition);
- The spouse (no age condition);
- Child or sibling — must satisfy at least one of:
- under 18; or
- aged 18 to 24, in full-time education; or
- any age, if mentally or physically incapacitated.
- Parent / parent of spouse / grandparent (or grandparent of spouse) — must satisfy at least one of:
- aged 55 or over; or
- under 55, but eligible to claim an allowance under the Government’s Disability Allowance Scheme.
So buying VHIS for a healthy 30-year-old younger sibling, or healthy 50-year-old parents, gets you no deduction — the relationship is on the list, but the age / status gate is not met. Always remember that the IRD test is relationship plus age / education / disability status.
Each eligible insured person carries one HK$8,000 / year cap. So if you cover yourself + spouse + two under-18 children + both sets of parents (over 55), the maximum total deduction is number of insured persons × HK$8,000.
Source: GovHK “Tax Deduction for Qualifying Premiums Paid under the Voluntary Health Insurance Scheme Policy” — children/siblings <18 / 18-24 in full-time education / any age if disabled; parents/grandparents ≥55, or <55 if eligible for the Government Disability Allowance. See citations at the foot of this page.
How are QDAP and TVC deducted?
A Qualifying Deferred Annuity Policy (QDAP) and Tax-Deductible Voluntary Contributions (TVC) to MPF share a single deductible pool of HK$60,000 per year. The cap is per taxpayer, not per policy.
A few scenarios:
- QDAP only — HK$60,000 → fully deductible; the QDAP+TVC pool is exhausted.
- TVC only — HK$60,000 → fully deductible; the QDAP+TVC pool is exhausted.
- TVC HK$40,000 + QDAP HK$20,000 → HK$60,000 in total, fully deductible.
- TVC HK$50,000 + QDAP HK$30,000 → HK$80,000 in total, but capped at HK$60,000; the excess HK$20,000 is non-deductible.
You can split between the two products as you wish. When both are claimed in the same year, IRD’s internal sequencing is TVC first, then QDAP, but this is purely a technical ordering — the total deduction is capped at HK$60,000 either way.
Are the VHIS pool and the QDAP / TVC pool separate, or shared?
Answer: completely separate, with no interaction. VHIS has its own pool (HK$8,000 per insured person). QDAP and TVC share a different pool (HK$60,000 per taxpayer). With all three products fully utilised in one year, the total deduction is:
Total deduction = (number of VHIS insured persons × HK$8,000) + HK$60,000 (shared QDAP + TVC pool)
For example: yourself + spouse + two children + both sets of parents (6 insured persons), all on VHIS, plus your own TVC contributions of HK$40,000 + a QDAP of HK$20,000:
- VHIS: 6 × HK$8,000 = HK$48,000;
- TVC + QDAP: HK$60,000;
- Total deduction: HK$108,000.
The actual tax saved depends on your marginal rate. Most Hong Kong salaried taxpayers fall under the progressive tax rates (2% / 6% / 10% / 14% / 17%). For a typical middle-income earner whose marginal rate sits at the 14% band, this HK$108,000 deduction saves roughly HK$108,000 × 14% ≈ HK$15,120 in tax. At the 17% band the saving is roughly HK$18,360.
The standard rate for the year of assessment 2025/26 is 15% on the first HK$5,000,000 of net chargeable income and 16% on the excess, but it only bites where “tax under the standard rate < tax under progressive rates”. Per the 2025/26 government budget documents, only around 12,000 Hong Kong taxpayers — concentrated above HK$5M of net income — are bound by the standard rate. For ordinary salaried taxpayers, the progressive marginal rate is the right way to estimate your saving.
How do VHIS, QDAP and TVC compare side by side?
Putting the three products next to each other is the clearest way to see how the pools work, where the caps sit, and which has a per-insured-person rule:
| Item | VHIS | QDAP + TVC (shared pool) |
|---|---|---|
| Annual deduction cap | HK$8,000 / insured person | HK$60,000 / taxpayer (shared) |
| Limit on number of insured persons | None (one HK$8,000 quota per person) | N/A (per-taxpayer pool) |
| Example: 3 insured persons fully utilised | HK$24,000 | — |
| Example: TVC HK$40K + QDAP HK$20K | — | HK$60,000 |
| All three combined | (number of insured persons × HK$8,000) + HK$60,000 — the two pools are entirely independent. | |
| Nature of funds | Insurance premium (medical cover) | Retirement savings / investment (QDAP annuity; TVC withdrawable from MPF after age 65) |
Sources: IRD VHIS and QDAP / TVC tax-deduction FAQs; MPFA TVC guidance. Full citations at the foot of this page.
How do I claim, and on which return?
VHIS, QDAP and TVC deductions are all claimed on BIR60 only — that is, the Tax Return — Individuals (used for single, married, and personal-assessment filings).
The other return numbers do not handle these deductions: BIR52 is the property tax return, BIR51 is the profits tax / partnership return, and neither has fields for VHIS / QDAP / TVC. Whether you are a salaried employee, self-employed, or a property owner, these three deductions are claimed inside BIR60.
Information needed when filing:
- VHIS: insured person’s name, HKID number, relationship to the taxpayer, policy number, certified plan certificate number (cert no.), and the qualifying premium actually paid;
- QDAP: policy number, insurer name, annuitant name, and the qualifying premium actually paid;
- TVC: trustee name, TVC account number, and contributions made during the year.
Each year, insurers and MPF trustees issue an Annual Premium Statement (or equivalent) to the policy holder / TVC account holder. This is the primary supporting document: just transcribe the figures into the return. (Some insurers label this “Tax Deduction Receipt”, “Tax Document” or similar — different name, same function.)
You do not need to send these documents in with your return, but you must keep them for at least 6 years from the end of the relevant year of assessment, so that the IRD can verify them on subsequent review. (Note: the “7-year” figure widely quoted online is the section 51C requirement on business records, not the standard for individual taxpayers.)
What if the policy is terminated or the insured changes mid-year?
Within a year of assessment (1 April to 31 March of the following year), if the policy is cancelled, the insured person is changed, or premiums are refunded, the deduction is calculated on the qualifying premiums actually paid — not at the full annual premium × HK$8,000 cap.
A few common situations:
- Cancellation within the cooling-off period: the insurer refunds all premium, so nothing was actually paid — nothing is deductible.
- Mid-policy surrender with a partial premium refund: deductible amount = premium actually paid − amount refunded, then subject to the HK$8,000 / insured-person cap.
- Insured person passes away mid-year, or the policy lapses: qualifying premiums actually paid up to the date of cessation are deductible.
- VHIS policy cancelled (e.g. for non-disclosure): the result depends on whether the insurer refunds premiums; refunded amounts are non-deductible, while paid-and-not-refunded amounts remain deductible.