HSBC Life | Tax deduction and protection – double your advantage with Tax Combo

March 2024

4 mins

A good wealth management plan should enable you to not only grow your wealth but lower your expenses, including even your tax. Look into Tax Combo, designed to help you reach your goals through tax deduction!

Tax combo: VHIS + QDAP can give you total tax deduction of up to HKD68,000¹

Every life stage comes with its own priorities. With the right plan, you can enjoy not only protection but tax benefits³:

How to apply for tax deduction

Typically, insurance companies will provide QDAP/VHIS policyholders with a policy summary at the end of each tax assessment year.

You can browse the Inland Revenue Department website or talk to tax consultants to learn how to complete Sections 9 and 10 of the BIR60 form with regard to the QDAP/VHIS premiums you have paid.

Keep the important documents listed below for filing your tax return and for possible IRD audits at a later date:

Annual QDAP policy summary issued by the insurance company
Annual VHIS policy summary

Medical and retirement protections are essential components of a financially secure life. By taking advantage of the tax benefits offered by our Tax Combo - VHIS + QDAP – you can not only stay protected but save on tax. Who says you can’t have it both ways? Start planning today!

Remarks:

Assuming that the taxpayer has paid HKD60,000 in QDAP premiums and HKD8,000 in VHIS premiums during the relevant tax assessment year (the respective amounts paid after the deduction of any premium discounts; insurance premium levies are not included), based on which the maximum tax-deductible amount is calculated. The actual amount saved may be lower the amount indicated, and is subject to review and assessment by the IRD.
Family members include the spouse and children of the taxpayer, and the paternal grandparents, maternal grandparents, parents and siblings of the taxpayer or the spouse.
The above examples are for illustrative purposes only. Each individual’s needs will differ based on circumstances and risk appetite. Before you consider acquiring an HSBC Life insurance product, we strongly suggest that you complete a Risk Profiling Questionnaire and financial needs analysis first.
Assuming that the taxpayer has paid a QDAP premium of HKD60,000 and/or a VHIS premium of HKD8,000 for each insured family member during the relevant tax assessment year (the respective amounts paid after the deduction of any premium discounts; insurance premium levies are not included), based on which the maximum tax-deductible amount is calculated. The actual amount of tax savings may be lower the amount indicated, and is subject to review and assessment by the IRD.
The tax savings indicated above are calculated based on a personal income tax rate of 17% for the 2023/24 tax assessment year, and are for illustrative purposes only. The actual amount saved may be different, and is subject to review and assessment by the IRD.

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Disclaimers:

Before claiming any tax deductions, you must meet all eligibility requirements set out in the provisions under the Inland Revenue Ordinance, while following the guidance issued by the Inland Revenue Department (“IRD”) of the Hong Kong SAR. Please note that the actual tax benefits of these policies would depend on your personal tax position and there might not be tax deductions benefits if you are not subject to salaries tax and personal assessment in the relevant year of assessment. Should you have any enquiries, please contact independent profession tax advisor. Please note that the tax law, regulations and / or interpretations are subject to changes and may affect any related tax benefits including but not limited to the eligibility criteria for a tax deduction. HSBC Life (International) Limited (“HSBC Life”) or The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) are not responsible for informing you about any changes in laws, regulations or interpretations, and how those may affect you. This article shall not constitute any tax advice. HSBC Life or HSBC shall not be liable for any loss, costs or damages which may be incurred (directly or indirectly) due to or relating to the contents herein.

The above tax deduction claims are only available to Hong Kong taxpayers. In order for the qualifying annuity premiums to be tax-deductible, the annuitant must be a HK identity card holder. For VHIS premiums, the insured person must be the taxpayer or his/her specified relative (please refer to www.ird.gov.hk for definition of specified relative). Different people have different needs based on their financial circumstances and risk appetites. We strongly recommend that you complete a Risk Profiling Questionnaire and a Financial Needs Analysis with our specialists before considering any HSBC financial products.

For QDAP and VHIS premiums, tax deduction eligibility is only applicable to the policyholder or his/her spouse (not living apart) who are Hong Kong taxpayers. Tax deduction for the qualifying premiums paid under QDAP and/or VHIS policy (not including levy) will be based on the premiums paid after deducting the premium discount (if any) for each year of assessment. The maximum aggregate tax-deductible amount applicable to both QDAP premiums and TVC is HKD60,000 per taxpayer per year. Each policyholder is entitled to the maximum tax-deductible amount for VHIS policy of HKD8,000 per life insured per year. For more information, please refer to www.ird.gov.hk or seek independent tax advice.

The amounts of the premiums paid for a QDAP certified by the Insurance Authority and/or VHIS policies certified by the Health Bureau do not represent the actual tax deductions you can get. Whether tax deduction is allowable for all or any part of the qualifying premiums paid for your QDAP and/or VHIS Policy shall be subject to your individual circumstances (as taxpayer), the provisions of the Inland Revenue Ordinance (Cap. 112 of the Laws of Hong Kong SAR) and the Inland Revenue Department's discretion. You are reminded to refer to the website of the Inland Revenue Department for details or to contact the Department directly for any tax-related enquiries.

HSBC Life (International) Limited and HSBC does not intend to give any tax advice to any person, and will not give any tax advice. The information contained in this article does not constitute an offer for the purchase or sale of any banking or insurance products or services. Products and services are subject to individual needs. Contact your financial planner to review your financial needs and risk acceptance level. This article should not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose.

HSBC Life (International) Limited (“HSBC Life”) has based this article on information obtained from sources it believes to be reliable, but which it has not independently verified. HSBC Life or The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) makes no guarantees, representations or warranties and accepts no responsibility or liability as to its accuracy or completeness. Information in this article is subject to change without notice.

HSBC Life is authorised and regulated by the Insurance Authority to carry on long-term insurance business in the Hong Kong SAR. HSBC Life is incorporated in Bermuda with limited liability, and is one of the HSBC Group’s insurance underwriting subsidiaries. Insurance products provided by HSBC Life are only intended for sale through HSBC in the Hong Kong SAR. For details and information about HSBC Life products, please visit the insurance-related pages at HSBC’s website or visit our branch. HSBC Life is a registered VHIS provider (Registration no.: 00042, effective date: 29 May 2020)

All the information in the article is updated as of March 2024

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