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Enjoy retirement income and health protection with tax deductions. Talk to an Insurance Specialist today.
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QDAP + VHIS = Retirement income and health protection + tax savings

It is no news that qualifying deferred annuity policy (QDAP) and Voluntary Health Insurance Scheme (VHIS) plans are tax-deductible. But did you know that, by complementing both, not only can you give yourself and your family all-round medical and retirement protection, but also enjoy tax deductions up to HKD68,0001, and together with premium discount, you could save even more!

Tax savings plans

HSBC VHIS Flexi Plan

Enjoy the peace of mind that comes with comprehensive medical coverage, from a plan that has a claims paid ratio of 97%2 and tax deduction of up to HKD8,0001.

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HSBC Income Goal Deferred Annuity Plan

Choose a 5-year or 10-year premium payment period, and enjoy a stable annuity income in your retirement plus tax deduction of up to HKD60,0001.

HSBC VHIS Standard Plan

Safeguard yourself with guaranteed policy renewals and no limits on lifetime benefits, all while enjoying tax deductions of up to HKD8,0001.

HSBC EarlyIncome Deferred Annuity Plan

Rest easy with regular retirement income after 5 years of premiums paid, with tax deduction of up to HKD60,0001.

Lower premiums, more tax savings

Apply for both VHIS and QDAP to enjoy premium discounts and more tax savings.

VHIS Flexi Plan:

  • Enjoy up to 60% off first-year premium3 on this plan if you apply together with our QDAP plans.

Income Goal Deferred Annuity Plan:

  • Enjoy total premium discount worth up to 25% of annualised premium over the first 5 years4, broken down as follows:
    - 1st policy year: up to 5% off
    - 2nd policy year: up to 5% off
    - 3rd policy year: up to 5% off
    - 4th policy year: up to 5% off
    - 5th policy year: up to 5% off

Please note discount of premiums is not tax deductible. T&C apply.

Contact our Insurance Specialists, who will help you find the right protection solution.

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Tax-saving tips

Tip #1

Calculating tax savings for QDAP and VHIS

The formula is simple as below:
Premium x Tax rate = Tax Savings

Keep in mind: The maximum tax-deductible amount for QDAP premiums is HKD60,0005 per tax assessment year, saving up to HKD 10,200 in tax6. The maximum tax-deductible amount for VHIS premiums is HKD8,000 per life insured9, saving up to HKD 1,360 in tax6.

Tip #2

Maximum tax deduction for VHIS

The upper limit for tax deduction is HKD8,000 per insured person per year.

This tax-deductible limit can be stacked. as Mr Fung’s example shows:

Mr Fung has applied for two VHIS policies, one for himself and one for his mother. The premiums for the two policies are HKD10,000 and HKD12,000 respectively. Both of them can enjoy medical protection, while Mr Fung can also qualify for a tax deduction of up to HKD16,000, saving up to HKD 2,720 in tax6!

Tip #3

Maximising tax deduction

The tax rate is one of the factors in determining how much tax can be deducted. If the highest income earner in a family applies for tax deduction for the other family members, that may result in a higher total tax-deductible amount!

Examples of tax deduction

Below are examples of individuals who stack their tax-deductible amounts by applying for their families and taking advantage of premium discounts to maximise their savings!

Mr. Chan

Mr. Wong and Mrs. Wong

Mr. Lee, Mrs. Lee and their son

Example 1: Mr. Chan, single (aged 30) 7

Insurance plan Tax savings
Assumed tax rate: 17%		 Tax savings + premium savings
HSBC VHIS Flexi Plan (Bronze) - Annual deductible: HKD0

First-year premium: HKD8,183
After 50% off3: HKD4,091.5		 HKD4,091.5 x 17%
= HKD695.6		 In the first year, Mr. Chan can save:

HKD4,091.5 (premium discount) + HKD695.6 (tax savings)
= HKD4,787.1
HSBC Income Goal Deferred Annuity Plan

Annualised premium over the first 5 years:HKD48,000
After 5% off4: HKD45,600		 HKD45,600 x 17%
= HKD7,752		 Over the first 5 years, Mr. Chan can save:

HKD2,400 (premium discount) + HKD7,752 (tax savings)
= HKD10,152 per year

Example 2: Mr. Wong (aged 35) and Mrs. Wong (aged 30)7

Insurance plan Tax savings
Assumed tax rate: 17%		 Tax savings + premium savings
HSBC VHIS Flexi Plan (Bronze) - Annual deductible: HKD0

Total first-year premium for the couple: HKD17,355
After 50% off + additional 10% family discount3: HKD6,942		 HHKD6,942 x 17%
= HKD1,180.2		 In the first year, they can save:

HKD10,413 (premium discount) + HKD1,180.2 (tax savings)
= HKD11,593.2
Each applied for HSBC Income Goal Deferred Annuity Plan

Annualised premium over the first 5 years:HKD120,000
After 5% off4: HKD114,000		 Mr. and Mrs. Wong’s combined tax-savings amount HKD114,000 x 17%
= HKD19,380		 Over the first 5 years, they can save:

HKD6,000 (premium discount) + HKD19,380 (tax savings)
= HKD25,380 per year

Example 3: Mr. Lee (aged 50), Mrs. Lee (aged 49) and their son (aged 22)8

Insurance plan Tax savings
Assumed tax rate: 17%		 Tax savings + premium savings
HSBC VHIS Flexi Plan (Bronze) -
Mr Lee and Mrs Lee’s annual deductible: HKD0
Their son’s annual deductible: HKD 16,000

Total first-year premium for the family: HKD35,720
After 50% off + additional 10%3 family discount: HKD14,288		 Combined tax-savings amount for the family: HKD14,288 x 17%
= HKD2,429.0		 In the first year, the family can save:

HKD21,432 (premium discount) + HKD2,429.0 (tax savings)
= HKD23,861.0
HSBC Income Goal Deferred Annuity Plan

Mr. and Mrs. Lee’s annualised premium over the first 5 years:HKD120,000
After 5% off4: HKD114,000		 Mr. and Mrs. Lee’s tax-savings for the family: HKD114,000 x 17%
= HKD19,380		 Over the first 5 years, Mr. and Mrs. Lee can save:

HKD6,000 (premium discount) + HKD19,380 (tax savings)
= HKD25,380 per year

While the above examples are for illustrative purposes only, they show that applying for a QDAP plan and a VHIS plan at the same time may increase the tax-deductible amount you’re eligible for. If you apply together with your family, you can even stack your tax deduction.

Talk to us, find out more!

Make an appointment and let our Insurance Specialists help you find the right protection solution.

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HSBC Premier Elite or Premier customer?

Get in touch with your Relationship Manager or HSBC Premier Elite Director. HSBC Premier customers can also call us on (852) 2233 3322.

Wondering how much you can potentially save on tax? 

Calculate now

Enter the following amounts for your year of assessment

1. Net chargeable Income
HKD

Net chargeable income is your total income NET of all allowances and allowable deductions (excluding QDAP and VHIS premiums)
2. Deductions for premium paid to QDAP
HKD

Each person could be eligible for a tax deduction of up to HKD60,000 for each year of assessment with an aggregate amount of QDAP premiums and contributions to a TVC account.

A taxpaying couple is allowed to allocate tax deduction for QDAP amongst themselves to claim the total deductions of HKD120,000, provided that the deduction claimed by each person does not exceed HKD60,000.
3. Deductions for premium paid to a VHIS Policy

Each person who or whose spouse is the policyholder of a VHIS policy can claim a tax deduction of up to HKD8,000 per insured person per year for the premiums paid for a VHIS policy. The insured person should be the taxpayer himself or any specified relative in the year of assessment. For more details, please refer to www.ird.gov.hk
  No. of insured person(s) - including the taxpayer or specified relative(s)

The insured person(s) should be the taxpayer or any specified relatives, which cover the taxpayer's spouse and children, and the taxpayer's or his/her spouse's grandparents, parents and siblings. For more details, please click here
  Total amount of deductible premiums
HKD

The maximum deduction allowable is capped at HKD8,000 for each insured person.

If a taxpayer purchased VHIS policies and paid qualifying premiums for himself and his wife in the amounts of HKD10,000 and HKD6,000 respectively, he can claim a total deduction of HKD14,000 (capped at HKD8,000 for his own VHIS policy, and HKD6,000 for his wife’s VHIS policy).

For more details, please click here
Result

Details on net chargeable income and deductions for premiumsEdit

1. Net chargeable income
HKD (nil)
2. Deductions for premium paid to QDAP
HKD (nil)
3. Deductions for premium paid to a VHIS Policy
   No. of insured person(s) 
(nil)
   Total amount of deductible premiums
HKD (nil)

The above calculator makes calculations based on progressive tax rates. For standard tax rates, the amount of potential tax savings will be total qualifying premiums x15%.

Any information listed or figures calculated on this website and calculator are for reference and general information only. They are not intended to constitute a recommendation or advice to any prospective customer and are not intended as a substitute for professional advice.  Neither HSBC Life nor HSBC provide any form of tax advice, you are advised to seek independent tax advice if in doubt. In no event will HSBC Life or HSBC be liable for any damages, losses or liabilities including without limitation, direct or indirect, special, incidental, consequential damages, losses or liabilities, in connection with your or any third party’s use of this website, or your reliance on or use or inability to use the information contained on this website.

Approximate tax amount you can potentially save with QDAP premium and / or VHIS premium for a year of assessment:

HKD

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Notes

  1. Each taxpayer is allowed to claim a tax deduction for his or her qualifying deferred annuity premiums up to a maximum limit of HKD60,000 per tax assessment year, which is an aggregate of qualifying deferred annuity premiums and Mandatory Provident Fund (MPF) tax-deductible voluntary contributions. In addition, each taxpayer who or whose spouse is the policyholder of a policy issued under a certified plan of Voluntary Health Insurance Scheme (VHIS) may claim tax deductions for the premiums paid up to HKD8,000 per insured person per tax assessment year. The amount of tax deduction in this example assumes a taxpayer paying premiums (excluding levy and discount) of HKD60,000 for qualifying deferred annuity policy (QDAP) and of HKD8,000 under VHIS per tax assessment year. The amounts are for illustrative purposes only. The actual amounts of tax deductible and/or saving depend on the personal circumstances, and may be different from the amounts illustrated. For details, please visit the website of the Inland Revenue Department (www.ird.gov.hk).
  2. Claims paid ratio is calculated as total claims amount paid divided by total claims amount incurred (after the consideration of any deductible and/or claims amount paid by first insurers for second claims, if applicable) in local currency, of the approved cases in 2022.
  3. Eligible for HSBC Customers who apply for (i) HSBC Income Goal Deferred Annuity Plan or HSBC EarlyIncome Deferred Annuity Plan, and (ii) HSBC VHIS Flexi Plan in the same insurance sales meeting during promotional period. Customers who apply together with their family members can enjoy an additional 10% premium discount on HSBC VHIS Flexi Plan. Offer subject to terms and conditions.
  4. Up to 25% off assumes a premium discount of 5% each year in policy year 1 - 5, accumulating to a total discount of 25% of annualised premium over first 5 years. Please note discount of premiums is not tax deductible. T&C apply.
  5. The above mentioned assumes that the annual QDAP premium paid by the taxpayer is HKD60,000 after all premium discounts have been deducted for the tax assessment year. The maximum aggregate tax-deductible amount applicable to both QDAP premiums and MPF tax-deductible voluntary contributions is HKD60,000 per taxpayer per year.
  6. The above example is based on an assumption of tax rate of 17%.
  7. The above example is based on HSBC VHIS Flexi Plan (Bronze) with an annual deductible of HKD0; and HSBC Income Goal Deferred Annuity Plan with 5-year premium payment period, 25-year accumulation period and 15-year annuity period.
  8. The above example is based on HSBC VHIS Flexi Plan (Bronze) with an annual deductible of HKD 0 for Mr. Lee and Mrs. Lee and HKD16,000 for their son; and HSBC Income Goal Deferred Annuity Plan with 5-year premium payment period, 25-year accumulation period and 15-year annuity period.
  9. Only policyholders and their spouses who are Hong Kong taxpayers are eligible for tax deduction. Tax deduction for qualifying premiums paid under a VHIS policy (excluding levy) will be based on the premiums paid after deducting the premium discount, if any. Your actual tax savings may be lower than the amount in the example, as each case is determined by the Inland Revenue Department. For more information, please visit www.ird.gov.hk or seek independent tax advice.

Tax Implications

Qualifying Deferred Annuity Qualifying Deferred Annuity Policy(“QDAP”): The certification status of the above QDAPs do not automatically guarantee that you will be eligible for a tax deduction for QDAP premiums you have paid. The certification status of the QDAPs is based on the features of the product as well as their compliance with the criteria set out in the guideline issued by the Insurance Authority (“IA”); not necessarily matters regarding other tax related criteria or your personal situation. 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. You should refer to the website of the IRD (www.ird.gov.hk) or contact the IRD directly for any tax related enquiries.

Voluntary Health Insurance Scheme (“VHIS”): Tax deduction eligibility is only applicable to policyholders or his/her spouse who are Hong Kong taxpayers. Tax deduction for the qualifying premiums paid under VHIS policy (not including levy) will be based on the premiums paid after deducting the premium discount (if any). For more information, please refer to www.ird.gov.hk or seek independent tax advice.

Disclaimer

Please refer to the product brochures of the respective products for their detailed product features and associated risks, and please refer to the policy provisions for the detailed terms and conditions.

Qualifying Deferred Annuity Policies and Voluntary Health Insurance Scheme plans mentioned on this webpage are not any kind of bank deposit or bank savings plan. Both are underwritten by HSBC Life (International) Limited (“HSBC Life”) and are intended only for sale 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. HSBC Life is authorised and regulated by the Insurance Authority (“IA”) of the Hong Kong SAR to carry on long-term insurance business in the Hong Kong SAR. Policyholders are subject to the credit risk of HSBC Life. If the policyholder discontinues and / or surrenders the Qualifying Deferred Annuity Policies in the early policy years, the amount of the benefit he / she will get back may be considerably less than the amount of the premium he / she has paid.

Any information listed and figures calculated on this website are for reference only. They are not intended to constitute a recommendation or advice to any prospective customers and are not intended as a substitute for professional advice. You should not act on any information on this website, without seeking specific professional advice. You may find the wealth management plan you need by undertaking an assessment for financial planning. This website provides general information issued from publicly available sources. HSBC Life or HSBC do not provide any form of tax advice. You are advised to seek independent tax advice if in doubt. In no event will HSBC Life or HSBC be liable for any damages, losses or liabilities including without limitation, direct or indirect, special, incidental, consequential damages, losses or liabilities, in connection with your or any third party’s use of this on this website, or your reliance on or use or inability to use the information contained on this webpage.

If you are in doubt about the meaning or the effect of the contents on this website, you should seek independent professional advice. Please note that the tax law, regulations and / or interpretations are subject to change and may affect any related tax benefits including the eligibility criteria for a tax deduction. HSBC Life or HSBC are not responsible for informing you about any changes in laws, regulations or interpretations, and how they may affect you. Further information regarding tax concessions applicable to Qualifying Deferred Annuity Policies and Voluntary Health Insurance Policies may be found at the webpage of the Insurance Authority: www.ia.org.hk.

The Hongkong and Shanghai Banking Corporation Limited (referred to as "HSBC") is an insurance agency of HSBC Life for the distribution of life insurance products. For monetary disputes arising between HSBC and you out of the selling process or processing of the related transaction, HSBC will enter into a Financial Dispute Resolution Scheme process with you; however any dispute over the contractual terms of the product should be resolved between HSBC Life and you directly.

HSBC Life is a registered VHIS Provider (Registration Number: 00042, Effective Date of Registration: 29 May 2020)

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