Tax Deductible Voluntary Contributions (TVC) is a new type of contributions under the MPF system. Contributions you make to the TVC account in each tax assessment year will be counted as a deductible item (up to the annual limit as stipulated by the HKSAR Government) when you report your taxable income. Contributions made to TVC accounts exceeding the tax deduction cap and other types of MPF voluntary contributions are not tax deductible.
The deduction cap for the tax assessment year of 2019/2020 is HK$60,000, which is an aggregate limit for both TVC and qualifying deferred annuity premiums. Based on the prevailing highest tax rate (i.e. 17%), the maximum tax savings can reach up to HK$10,200 every year!
All contributions in the TVC account, regardless of tax deductible or not, has to be preserved until the retirement age of 65 (unless exempted on other statutory grounds) before any withdrawal.
Key Features of TVC
Easy
Can choose to open a TVC account with MPF scheme that meets your needs and make contributions directly to the account without going through the employers.
Flexible
Flexible contribution terms, allowing you to increase or reduce the amount of contributions, or adjust the contribution means, according to your own circumstances.
Autonomous
Most MPF schemes offer TVC accounts. The various fund options under the schemes are also available to TVC account holders.
How does TVC differ from other voluntary contributions?
| Employee Voluntary Contributions (EEVC) | Special Voluntary Contributions (SVC) | Tax Deductible Voluntary Contributions (TVC) | |
|---|---|---|---|
| Scheme Selection | Chosen by employer | Chosen by member | |
| Payment Method | Via employer payroll | Directly contributed by member to MPF scheme | |
| Payment Flexibility | According to the regular payroll schedule | Can make regular or one off payment | |
| Tax Deductible | N/A | Counted as a deductible item (up to the annual limit as stipulated by the Government) | |
| Withdrawal Conditions | Upon termination of employment | According to own needs | Same condition as MPF Mandatory Contributions |
Eligibility for TVC
TVC is one of the efficient ways to save tax, while at the same time increasing your retirement savings. Any person who falls under any one of the following categories may open a TVC account:
- a current employee member of an MPF Scheme
- a current self-employed member of an MPF Scheme
- a current personal account holder of an MPF Scheme;
- a member of an MPF exempted ORSO scheme
Each eligible person can only have one TVC account under an MPF Scheme. You may at any time choose to transfer the accrued benefits derived from TVC in lump sum to another MPF Scheme that offer TVC. Transfers from TVC account to contribution account or personal account will not be accepted and you cannot request for partial transfer to any account.
How to enjoy the tax concession of TVC?
Your MPF trustee will provide a TVC summary within 40 days after the end of each tax assessment year, to facilitate you in filling in the relevant information on the tax return if TVC is made by you to the scheme during a year of assessment.
You are responsible for the application of tax deduction and keeping track of how the maximum tax deductible limit is fully utilized. Please note that the tax deductible limit is an aggregate limit for both TVC and qualifying deferred annuity premiums.
For enquiries, call BCT MPF Expert at 2298 9888 or fill in your information in the campaign page, we will get back to you as soon as possible. .
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