The tax-saving trio: TVC, deferred annuity and VHIS compared
The 'tax-saving trio' usually means three tools that are deductible under salaries tax and help retirement preparation: tax-deductible voluntary contributions (TVC), qualifying deferred annuities (QDAP) and VHIS. Used well, they ease your tax while building retirement savings and healthcare cover.
What are they, and the deduction caps?
TVC and QDAP share an annual deduction cap of up to HK$60,000; VHIS is separate at up to HK$8,000 per insured person per year. They are different deductions and can be used together.
| Tool | Role | Annual cap |
|---|---|---|
| TVC | Retirement saving in an MPF account | Shares HK$60,000 with QDAP |
| QDAP (deferred annuity) | Regular income after retirement | Shares HK$60,000 with TVC |
| VHIS | Inpatient medical cover | HK$8,000 per insured person |
Caps and eligibility follow the Inland Revenue Department.
What each does
- TVC: extra saving beyond mandatory MPF; generally locked until 65.
- QDAP: a qualifying deferred annuity giving regular income after retirement, emphasising 'income for life'.
- VHIS: certified medical cover that reimburses inpatient care and can insure family for a deduction.
Terms differ; combine by your goals.
How to use the trio well
- Match needs: TVC for saving, QDAP for income, VHIS for medical cover.
- Mind the caps: TVC and QDAP share HK$60,000; VHIS is separate at HK$8,000/insured.
- Start early: annuities and medical cover are more favourable the earlier you take them.
- Don't deduct for deduction's sake: confirm the product fits your retirement needs first — the tax is a bonus.
General education only, not personalised tax or financial advice; amounts follow the IRD.
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Frequently asked questions
What are the 'tax-saving trio'?
Usually tax-deductible voluntary contributions (TVC), qualifying deferred annuities (QDAP) and VHIS — all deductible under salaries tax and helpful for retirement preparation.
How much can the trio deduct per year?
TVC and QDAP share an annual cap of up to HK$60,000; VHIS is separate at up to HK$8,000 per insured person per year. Based on amounts paid and subject to the IRD.
Are the TVC and QDAP caps separate?
No. TVC and QDAP share the same annual HK$60,000 cap; VHIS is a separate deduction.
Should I buy all three?
It depends on your needs and budget. Combine by goal — TVC for saving, QDAP for income, VHIS for medical cover; confirm the product fits your retirement needs first, as the tax is a bonus, not the only reason.
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