Create your own “tax allowance” and save up to HK$10,200 with an easy and quick TVC management experience



For first jobbers who earn a moderate salary, tax may mean a little. As you climb up the career ladder and your pay rises, tax could become a burden you cannot overlook. You probably start to seek every possible way to save on your tax, such as child and dependent parent allowances.

While not everyone gets to benefit from those allowances, Tax Deductible Voluntary Contributions (TVC) can be the Genie from your oil lamp that helps fulfill your two wishes, as introduced below, when it comes to tax management, meanwhile providing additional protection for your retirement.

I. TVC saves you up to HK$10,200 of tax

Starting from April 2019, qualifying deferred annuity policy holders or MPF TVC contributors enjoy tax deduction benefits capped at HK$60,000 annually – the total amount of tax deductible from these two types of schemes combined. It means, based on the existing maximum tax rate (i.e. 17%), up to HK$10,200 of tax can be saved per year as your retirement fund!

TVC “converts” your tax-to-be-paid into savings for your retirement. For those who are closing in on their retirement or earn a high income, TVC may offer better protection for your future. TVC provides allowance benefits^ and alleviates your tax burden, meanwhile also prepares you for your retirement.

II. It offers flexibility and agility

TVC is not linked to income. You can choose to make their contributions monthly or with a one-off payment. The amount and frequency of contributions can also be adjusted at any time according to your personal financial situation.

The flexibility and agility are particularly suitable for those who earn a flexible income, allowing them to increase or decrease their contributions to fit their needs of the month. It also frees them from the pressure of making regular payments, granting them a certain degree of cash liquidity.

Principal’s MPF Schemes Series 800, for instance, provides the options of a minimum monthly TVC payment of HK$300, or an annual lump sum payment of HK$3,000.

In addition, TVC account set-up is quick and easy. You can open an account with any MPF trustee of your preference, skipping the trouble to make your contributions through your employer to the trustee. If you are an existing Principal client, you can simply open your TVC account by clicking here to submit your documents online.

III. It offers better protection for your retirement

Under the existing MPF system, mandatory contributions from an employer and an employee is capped at 5% of the employee’s income, or a total of HK$3,000. It doesn’t take a math genius to know that mandatory contribution alone may be insufficient for a truly worry-free retirement. TVC, therefore, provides additional protection and better prepares you for your retirement.

TVC basically works the same way as MPF, as both offer various types of funds for you to choose from. For most employees who already have some experience in managing their MPF, TVC may be a more familiar – hence easier – option as compared to investing in an insurance policy for additional retirement protection.

On another hand, TVC allows scheme members to choose funds according to their risk tolerance, and modify their portfolio at any time to cater to their needs in different stages of life.

A thoughtful, comprehensive retirement protection plan not only benefits you in your retirement days, it is also a way to show your care and commitment to your family.


Investment involves risks.

^ Actual tax benefits are affected by multiple factors such as personal income, tax allowances or the amount of TVC contributions.

Learn more about Principal’s TVC offerings at