Tax Deductible Voluntary Contribution Member
From 1 April 2019, any person may open a Tax Deductible Voluntary Contribution (TVC) account in MPF schemes if that person has fulfilled the applicable laws and requirements.
What is TVC?
TVC is a new type of contributions and can only be paid into a TVC account of an MPF scheme. TVC may enjoy tax concession. Other characteristics of TVC are as follows:
- TVC can only be made directly by the persons who fulfil the eligibility requirements as mentioned below
- Involvement of employers is not required
- Although it is voluntary in nature, TVC is subject to the same vesting, preservation and withdrawal restrictions applicable to mandatory contributions
Accordingly, any accrued benefits derived from TVC (including the TVC made in excess of the maximum tax deduction limit during a tax assessment year) will be preserved.
What are the eligibility requirements of TVC member?
Any person who is:
- a current holder of contribution account or personal account of an MPF scheme; or
- a current member of an MPF exempted ORSO scheme
can make TVC to an MPF scheme by opening a TVC account.
The trustee of the scheme may reject any application to open a TVC account in the event of (i) having reason to know that information and documents provided to the trustee are incorrect or incomplete; (ii) failure of applicants to provide information and documents as required by the trustee to ensure compliance with applicable laws and regulations relating to anti-money laundering / tax reporting; and/or (iii) other circumstances which the trustee may consider appropriate.
Can TVC accrued benefits be transferred?
TVC member may, at any time, choose to have ALL accrued benefits in the TVC account in the scheme transferred to another TVC account in another MPF scheme nominated by such TVC member. Transfer of TVC accrued benefits in part or to a contribution account / personal account, however, will not be accepted.
For the avoidance of doubt, such benefit transfer amount cannot be claimed as deductions for taxation purpose.
What’s amount of tax concessions for TVC?
TVC may be eligible for tax concessions starting from the year of assessment 2019/2020. The maximum tax deductible amount for the year of assessment 2019/2020 onwards is HK$60,000. It is an aggregate limit for both TVC and other qualifying annuity premiums. For further details on tax issues, please refer to the latest announcements by the Inland Revenue Department of the Government of the Hong Kong SAR.
How to withdraw the TVC accrued benefits?
Members should note that accrued benefits held in a TVC account can only be withdrawn upon retirement at age 65 or on other statutory grounds under the MPF legislation.
To claim the TVC accrued benefits must under the following circumstances:
- reach age 65;
- early retirement at age 60 or above;
- permanent departure from Hong Kong;
- total incapacity;
- terminal illness;
- small balance; or
Comparison of Different Types of Member Voluntary Contributions
Tax Deductible Voluntary Contributions
Employee Standard Voluntary Contributions
Special Voluntary Contributions
|Eligibility*||(i) An employee member, self-employed person member or personal account of an MPF scheme; or
(ii) A member of an occupational retirement scheme in respect of which an exemption has been granted under section 5 of the MPFS Ordinance
|A current employee member of the Scheme||Any person who is or had been a member of an MPF scheme or of an occupational retirement scheme|
|Tax Deductible Concession||Yes||No||No|
|TVC Contribution Summary||Annually||Not applicable||Not applicable|
|Protection against Bankruptcy Ordinance||No||No||No|
|Withdrawal Criteria||Upon Retirement at age 65 or other statutory grounds under the MPF legislation||Upon cessation of employment||Free withdrawal|
Tax Deductible Voluntary Contributions Account Payment Method
Lump sum contribution
Please click here to view the FAQ to TVC.
Investment involves risks. Prices of units of the constituent funds may go down as well as up. The past performance information is not indicative of future performance.
The above information is for reference only. You should not solely rely on the stand-alone information to make any investment decision.
You should consider your own risk tolerance level and financial circumstances before making any investment choices. When, in your selection of constituent funds, if you are in doubt as to whether a certain constituent fund is suitable for you (including whether it is consistent with your investment objectives), you should seek financial and/or professional advice and choose the constituent fund(s) most suitable for you taking into account your circumstances.