Tax Deduction
The Inland Revenue Ordinance (Cap.112) gives effect to a new concessionary tax deduction under salaries tax and personal assessment to individuals who purchase Certified Plans for themselves or their specified relatives under the Voluntary Health Insurance Scheme ("VHIS") since 1 April 2019.
Taxpayer who or whose spouse is the policyholder of a policy issued under a Certified Plan of VHIS may claim tax deductions up to HK$8,000 per insured person for the premiums paid in relation to the Certified Plan. The insured person of the Certified Plan 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.
The tax deduction becomes effective in the year of assessment commencing on 1 April 2019 and to all subsequent years of assessment. Premium paid for Certified Plans on or after 1 April 2019 are eligible for tax deduction. Taxpayers should keep the premium receipts or the annual premium statement issued by VHIS Providers as the supporting document for tax deduction.
Example 1: A taxpayer purchased a policy under a Certified Plan for himself
Annual Premium Paid (Depending on age/product)
Tax-deductible Amount (Capped at HK$8,000 per insured person)
Amount of Tax Saved (Assuming Tax Rate is 15%*)
Scenario 1
HK$3,000
HK$3,000
HK$450
Scenario 2
HK$4,000
HK$4,000
HK$600
Scenario 3
HK$4,800
HK$4,800
HK$720
Scenario 4
HK$8,000
HK$8,000
HK$1,200
Scenario 5
HK$12,000
HK$8,000
HK$1,200
Example 2: A taxpayer purchased policies under Certified Plans for himself and his specified relatives
Insured Person
Annual Premium Paid (Depending on age/product)
Tax-deductible Amount (Capped at HK$8,000 per insured person)
Amount of Tax Saved (Assuming Tax Rate is 15%*)
Taxpayer
HK$5,000
HK$5,000
HK$750
Spouse
HK$4,100
HK$4,100
HK$615
Grandmother
HK$16,000
HK$8,000
HK$1,200
Father
HK$12,000
HK$8,000
HK$1,200
Mother
HK$11,000
HK$8,000
HK$1,200
Son
HK$2,500
HK$2,500
HK$375
Total
HK$50,600
HK$35,600
HK$5,340
Example 3: Two taxpayers (a son and a daughter) purchased three policies under Certified Plans for the same insured person (a father)
Taxpayer
Policies and Annual Premium Paid
Tax-deductible Amount (Capped at HK$8,000 per insured person)
Amount of Tax Saved (Assuming Tax Rate is 15%*)
Total Amount of Tax Saved
Son
Policy 1: HK$4,000
Policy 2: HK$6,000 HK$4,000
HK$4,000 HK$600
HK$600 HK$1,200
Policy 2: HK$6,000 HK$4,000
HK$4,000 HK$600
HK$600 HK$1,200
Daughter
Policy 3: HK$6,000
HK$6,000
HK$900
HK$900
*As from the year of assessment 2018/19, the standard tax rate is 15% and the marginal tax rates are 2%, 6%, 10%, 14% and 17%.
