How to Get Tax Deduction in 2019? Tip for Hong Kong Tax Payers

Do you know you can get a tax deduction for the tax year of 2018/2019?

It’s like this:

As a tax payer in Hong Kong, your tax deductible limit is HK$60,000 each year, and you can get tax deductible up to $10,200. Here is how.

This 60K can be the sum of Mandatory Provident Fund Tax Deductible Voluntary Contributions (MPF TVCs) and deferred annuity premiums.

Whether you make MPF TVCs of $60,000 or pay $60,000 of deferred annuity premiums, or make MPF TVCs and purchase a qualifying deferred annuity, you can still claim deductions under salaries tax and personal assessment up to 60K.

Below is an example.

TAX YEAR 2018/2019

HKD

(A) Total income of the year of assessment

(B) Allowances and Tax Deductions

-- Basic allowance

-- Mandatory contributions to approved retirement plans

-- Eligible extended annuity premium

Taxable income (A)-(B)

Tax payable

Under Old Tax System

$600,000


$132,000

$18,000


$450,000

$58,500 (C)

New Tax System with Tax Deduction

$600,000


$132,000

$18,000

$60,000

$390,000

$48,300 (D)

You can save up to (C) – (D) = $10,200 (or 17%) on tax

That’s how you would have saved more money for your retirement.

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