If you’re planning retirement and looking to pay less tax in Hong Kong, a TVC account—Tax Deductible Voluntary Contributions—is a great financial tool. Regardless of whether you’re employed by an employer, self-employed, or part of a team working on an Employer of Record (EOR) solution, getting familiar with how TVC works can aid in your successful retirement and tax-saving strategy.
Here, we are able to outline the blessings of a TVC account, how it works within Hong Kong’s MPF regime.
What is a TVC Account?
A TVC account is a voluntary MPF account that enables qualified individuals to make extra contributions in addition to the compulsory 5% contribution to the Mandatory Provident Fund (MPF) system in Hong Kong.
What sets TVC apart is that it is tax-deductible—you can claim deductions of up to HK$60,000 per annum when you file your Hong Kong salaries tax.
Who can open a TVC account?
- MPF scheme members (self-employed persons, employees)
- MPF excluded ORSO scheme members
- Employees hired through EOR (Employer of Record) platforms who are registered under an MPF plan
Major Advantages of an account of TVC
Here’s why it’s a good idea to open a TVC account:
- Tax Savings
You can deduct up to HK$60,000 per year from your taxable income, which can bring down your total tax drastically.
- Retirement Boost
TVC contributions compound over time and accumulate tax-free until withdrawal, giving an additional financial buffer at retirement.
- Flexibility
You control the amount and frequency of giving. It’s completely voluntary and flexible to accommodate your budget goals.
- Better Investment Opportunities
The majority of TVC accounts offer diverse MPF funds so that individuals can select plans in accordance with their retirement horizon and risk tolerance.
Employer Tip: Providing TVC benefits through an EOR partner like FastLane HR can give your employees greater choices and make them feel more secure.
How TVC Contributions Help Towards Taxes
Let’s consider a simple example.
If you earn an annual income of HK$400,000 and contribute HK$60,000 to a TVC account, your taxable income is lowered to HK$340,000.
That decrease can save you thousands in salary tax annually—while also building a bigger retirement nest egg.
For companies using an EOR provider to employ, encouraging employees to open TVC accounts can be a valuable tax benefit that improves talent retention.
TVC Accounts and Staff Within the EOR Services
You might be wondering whether an employee employed through an EOR in Hong Kong can open a TVC account.
Yes. If the EOR employer puts the employee into a qualifying MPF scheme (as required by Hong Kong law for the majority of employees), he or she may also have a TVC account.
At FastLane HR, we:
- Act as the Hong Kong legal employer for you
- Administer all MPF registration, contributions, and compliance
- Help employees to learn and open TVC accounts.
- Give support for tax-deductible planning and adherence
Safeguard your staff’s financial stability while staying compliant—allow FastLane HR to manage the complexity of benefits and payroll.
Why Employers Should Facilitate TVC Contributions
Having a TVC account in your benefits package, especially if you have global or remote staff working via an EOR, has long-term benefits:
- Recruit and retain high-quality individuals with retirement benefits
- Demonstrate concern about long-term money health of employees.
- Improve employer branding by offering financial education programs.
- Achieve complete adherence without overwhelming HR workload
Through FastLane HR’s EOR solution, companies can provide these benefits without needing to create a legal presence in Hong Kong.
EOR and TVC: A Winning Combination for Teams Worldwide
Combining EOR services with TVC contribution management is a great plan for global companies with a base in Hong Kong:
- Your employees enjoy compliant MPF coverage and tax-saving TVC accounts access
- You don’t have the administrative burden of controlling payroll and benefits in-house
- You stay competitive in the job market with a good benefits package.
FastLane HR has you covered, everything from onboarding and MPF registration through to salary tax and voluntary contribution assistance.
Final Thoughts
A TVC account is an excellent method for individuals in Hong Kong to save for retirement and pay lower taxes. For companies, particularly those utilizing EOR services, providing employees with access to a TVC via a trustworthy partner can assist in compliance with regulations, employee retention, and employee satisfaction.
Ready to Max Out Tax Efficiency & Employee Benefits?
FastLane HR simplifies hiring in Hong Kong with a full suite of Employer of Record (EOR) services, such as:
- MPF registration and compliance
- Salary tax declaration
- TVC contribution support
- Payroll, HR, and benefits administration
Contact us today to learn more about how we can support your company and grow your HR operations in Hong Kong.