Tax deduction for VHIS plans
You can purchase a VHIS certified plan for yourself or your family members and claim a tax deduction on the qualifying premiums paid.
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Each policy holder can claim a tax deduction on qualifying premiums up to HK$8,000 per insured person each year (excluding premium levy).
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There's no limit on the number of insured persons and/or policies claimed.
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If you purchase a VHIS plan, you'll receive a proof of premium payment from your insurer by the end of April each year. It will show the premiums paid during the previous 12 months ending in March of the same year. Then you'll know the amount of qualifying premiums you can claim for tax deduction.
How to calculate the tax deduction
Example 1: Enrol for myself
I'm a taxpayer and I purchased a certified plan for myself. What tax deduction will I receive?
It depends on the amount of premium paid and your prevailing tax rate (2-17%). If your annual premium is HK$3,000 and your tax rate is 10%, you'll save HK$300. With an annual premium of HK$12,000, only HK$8,000 is eligible. So if your tax rate is 15%, you'll save HK$1,200.
|
|
|
Annual premium paid |
Eligible amount for tax deduction |
|
Tax rate |
|
Amount of tax saved |
|
|
You (the policy holder and insured person) |
$3,000 |
$3,000 |
X |
10% |
= |
$300 |
|
|
|
Annual premium paid |
Eligible amount for tax deduction |
|
Tax rate |
|
Amount of tax saved |
|
|
You (the policy holder and insured person) |
$12,000 |
$8,000 |
X |
15% |
= |
$1,200 |
Example 2: Enrol for myself, my spouse, my son and my spouse's mother
I'm the policy holder and I purchased certified plans for myself and my family. Can I receive multiple deductions as a taxpayer?
Yes. You'll receive a deduction for every eligible plan purchased for yourself and specified relatives. Say you purchased plans for yourself (HK$5,000 premium), your spouse (HK$4,100 premium), your spouse's mother (HK$12,000 premium) and your son (HK$2,500 premium). If your tax rate is 15%, you'll save HK$2,940.
|
|
|
Annual premium paid |
Eligible amount for tax deduction |
|
Tax rate |
|
Amount of tax saved |
|
|
You (the policy holder and insured person) |
$5,000 |
$5,000 |
X |
15% |
= |
$750 |
|
|
Spouse (insured person) |
$4,100 |
$4,100 |
X |
15% |
= |
$615 |
|
|
Spouse's mother (insured person) |
$12,000 |
$8,000 |
X |
15% |
= |
$1,200 |
|
|
Son (insured person) |
$2,500 |
$2,500 |
X |
15% |
= |
$375 |
|
Total |
= |
$2,940 |
Example 3: Enrol my mother in 2 separate plans
Both my sister and I purchased a certified plan for our mother. Will we each receive a deduction?
Yes, each policy holder can receive a tax deduction up to HK$8,000 in qualifying premiums for each certified plan purchased. Assume you and your sister each paid HK$6,000 in premiums for your mother's plans. If both of your tax rates are 15%, you'll each save HK$900.
|
|
|
Annual premium paid |
Eligible amount for tax deduction |
|
Tax rate |
|
Amount of tax saved |
|
|
You (the policy holder, taxpayer) |
$6,000 |
$6,000 |
X |
15% |
= |
$900 |
|
|
|
Annual premium Paid |
Eligible amount for tax deduction |
|
Tax rate |
|
Amount of tax saved |
|
|
Your sister (the policy holder, taxpayer) |
$6,000 |
$6,000 |
X |
15% |
= |
$900 |
Read more:
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