【Finance Wiz @Daniel】Tax deduction methods 2026｜Benefits of Voluntary Health Insurance Scheme (VHIS) + Qualifying Deferred Annuity Policy (QDAP)
Finance2026-02-10
7 Mins Read
A daily cup of coffee might be a common morning routine for many workers. This seemingly small pleasure, accumulated overtime, can amount to a significant annual expense. So, is there a way to enhance your quality of daily life with less burden, even turning it into part of your annual financial planning?
The key may lie in your annual tax management. When we talk about ‘Tax deduction methods,’ the Qualifying Deferred Annuity Policy (QDAP) and Voluntary Health Insurance Scheme (VHIS) — the ‘Tax-saving duo’ — are often mentioned. They can help you save part of your tax bill each year. The savings can become your ‘Exclusive coffee fund,’ or be used to improve other aspects of your lifestyle. Today, let me walk you through how this ‘Tax-saving duo’ can help you manage the present, upgrade your daily life, and plan for the future.
Tax Savings & Protection go hand-in-hand
Grab the last opportunity! Apply for a designated tax-deductible plan by 31st March 2026, so you can apply for tax deductions for the 2025/26 taxable year1. You may enjoy individual tax savings of up to HKD 11,5603,4,6,8!
What is a QDAP?
A QDAP is an insurance product designed to help individuals plan for their future retirement. Purchasers can pay premium regularly during the premium payment term. After reaching a specified age, they will begin receiving a fixed annuity income during the designated annuity period, ensuring the purchaser’s continuous financial support throughout retirement1.
What is VHIS?
The value of VHIS goes beyond tax savings. It is a government initiative launched in Hong Kong in 2019, which aims to encourage citizens to purchase medical insurance, offering an alternative for those who prefer private healthcare services, such as hospitalisation, surgeries, and other high-cost medical expenses. In the long term, it also helps to alleviate pressure on the public healthcare system by encouraging the use of private medical services through hospital insurance coverage2.
How do the ‘Tax-saving Duo’ safeguard your present and future quality of life?
For the present, the ‘Tax-saving duo’ not only helps you save tax but also assists in planning retirement with QDAP, while VHIS provides crucial protection against unexpected health issues, effectively reducing immediate financial burdens.
1. Maximising tax deduction strategies:
- The maximum deductible amount for QDAP premiums is HKD60,000. If you purchase and pay HKD 60,0003,4 for a QDAP policy, and assuming the highest marginal tax rate of salaries tax of 17% applied, you could save up to HKD10,2003,4,5 in tax.
- The maximum deductible amount for VHIS premiums is HKD8,0003,6. If the premium you pay qualifies for the full deduction, each taxpayer can save up to HKD1,3603,6,7 in taxes per eligible insured person, based on the highest marginal tax rate of salaries tax of 17% applied.
- An individual can save up to HKD11,5603,4,6,8 in tax through ‘Tax-Saving Duo’.
Looking for protection while enjoying tax deductions?
Try our TaxBliss Calculator now and discover how 'AXA WiseGuard Pro Medical Insurance Plan' and 'IncomeBliss Deferred Annuity Plan' can provide you with both!
2. QDAP — A catalyst for future planning:
While future planning is necessary and should be prepared early, many people struggle with disciplined retirement savings. The QDAP is a suitable tool, combining the incentives of ‘Immediate tax benefits’ with the advantages of ‘Retirement security,’ embedding future planning into today’s decisions.
3. VHIS ─ Safeguarding your health, enjoying the present
A comprehensive medical protection primarily prevents sudden health issues from eroding your hard-earned savings or impacting your lifestyle and planning. Take AXA WiseGuard Pro Medical Insurance Plan (referred to as ‘WiseGuard Pro’) as an example, it offers four different benefit levels and three annual deductible options. Coverage includes a choice of 3 ward classes from general ward to standard private rooms, with an annual limit of up to HKD 40 million and no lifetime benefit limit. The top-tier ‘Prestige’ level even provides worldwide coverage (excluding the US)9, ensuring comprehensive care across regions.
1. VHIS ─ Countering medical inflation:
With rising demand and strained public healthcare resources, coupled with increasing private medical inflation, VHIS not only covers hospitalisation and surgery expenses but also certain pre- and post-hospitalisation outpatient benefits, helping you meet long-term medical needs.
2. QDAP ─ Creating your own retirement ‘Long-term income’:
With longer life expectancy raising retirement costs, QDAP gives confidence in meeting long-term needs after retirement, preparing for the future for themselves and their families.
AXA's ‘IncomeBliss Deferred Annuity Plan’ helps you flexibly plan your future, offering options such as choosing a 5-year or 10-year premium payment terms, as well as a 10-year or 20-year annuity period10, helping you align your plan with your retirement timeline. You can choose the policy currency in either HKD or USD to plan for your future. You can also choose between cash payouts to the annuitant or leave your annuity payments to accumulate interest11. If you wish to change your annuity payment options, you can do so at any time by providing written notice, without any additional charges12.
How do VHIS and QDAP work together?
- VHIS acts as a guardian, protecting your ability to create wealth and enjoy life today and tomorrow from unexpected health issues.
- QDAP acts as a wise gardener, enabling you to continue enjoying life after retirement by planting seeds for stable future income.
Together, they balance present risks and future planning, providing complete care for your financial lifecycle.
Why should you buy the ‘Tax-saving duo’?
Let’s shift our mindset—don’t see the ‘Tax-saving Duo’ as an extra burden, but as essential protection and retirement savings you should plan for. The tax savings are a bonus. If future planning is a must, and these tools help you achieve it with added tax benefits, that’s reason enough to purchase the ‘Tax-saving Duo’.
Tax Savings & Protection go hand-in-hand
Grab the last opportunity! Apply for a designated tax-deductible plan by 31st March 2026, so you can apply for tax deductions for the 2025/26 taxable year1. You may enjoy individual tax savings of up to HKD 11,5603,4,6,8!
Life stage | VHIS strategy | QDAP strategy |
Early career | ||
Early career | Build basic protection with entry-level flexible plans at affordable premiums, while enjoying tax benefits. | Consider longer contribution periods (e.g., 10 years) with lower annual premiums, easing cash flow pressure, it’s suitable for those with less stable income. |
Career growth/Family building | ||
Career growth/Family building | Review if coverage is sufficient; Upgrade coverage to meet higher needs, consider family policies for greater tax savings. | Increase premiums amounts at policy inception or purchase additional QDAP policies to build core retirement savings, accumulating larger future cash flows. |
Career peak / Pre-retirement | ||
Career peak / Pre-retirement | Review coverage limits and terms to ensure adequacy for advanced medical needs. | Entering the stage of preparing for retirement, it is even more important to ensure financial stability. You can allocate part of your investment portfolio—which may currently lean toward growth-oriented assets such as stocks and funds—into purchasing an additional QDAP policy. This helps reduce volatility risk and ensures a steady cash flow during retirement. |
Practical deployment tips:
- Tax timing: Pay attention to policy effective dates to ensure premiums are paid within the target tax year, enabling successful tax deduction3.
How to apply for tax deduction3?
- You can apply for tax deductions through the eTAX online tax filing platform or by completing a physical tax return form. In the section titled ‘Qualifying Premiums Paid under Voluntary Health Insurance Scheme Policy’ or ‘Qualifying Annuity Premiums and Tax Deductible MPF Voluntary Contributions('TVC'),’ and simply enter the amount of ‘Qualifying Premiums.’
- While you do not need to submit supporting documents when applying for the deduction, taxpayers should keep premium receipts and annual summary for six years in case of future verification by the Inland Revenue Department. - Product selection: When choosing products, compare not only premiums but also reimbursement models (limits per item), coverage, network services for health insurance; and for annuities, understand the proportion of guaranteed vs. non-guaranteed returns, flexibility of withdrawals, and insurer’s financial strength. AXA’s ‘VHIS x QDAP’ has consistently earned 10Life 5-star ratings, with AXA WiseGuard Pro Medical Insurance Plan achieving 10Life 5- star rating for 5 consecutive years across all three ward classes (general ward, semi-private room and standard private room) and IncomeBliss Deferred Annuity Plan recognised with the 10Life 5-Star Award in QDAP (Growth Income) for 2 consecutive years, achieving market exclusive13 through strength.
From coffee to blueprint: Making tax deduction part of financial planning
Finally, it’s important to emphasise that VHIS and QDAP are efficient pieces of the future planning puzzle, but not the whole picture. True financial health comes from balanced planning:
- Complement with emergency funds: No matter how comprehensive your medical insurance, it cannot replace an emergency fund covering 3–6 months of living expenses, used for unemployment or unexpected non-medical expenses.
- Asset balance: High-return investments like stocks and funds carry higher risks, while QDAP offers lower returns but more stable. Diversification reduces the impact of market fluctuations on your overall portfolio.
- Coordinate with MPF: MPF is your basic retirement reserve, while QDAP supplements retirement income, giving you greater control over your retirement life.
True financial freedom depends on disciplined planning for ‘Needs’ (such as protection and retirement) to confidently pursue ‘Wants’ (like coffee freedom, world travel, hobbies), while maintaining the capacity to keep moving forward. AXA’s ‘Tax-saving Duo’ offers an excellent entry point to achieve both goals with tax benefits.
Early planning ─ A gift to your future self
Therefore, I believe everyone has realised that VHIS and QDAP are not just ‘tax deduction tools,’ but also a proactive future planning. The tax savings are today’s coffee aroma, while the planning is tomorrow’s peace of mind.
Start now by booking a consultation with our professional financial advisors to learn how AXA’s ‘Tax-saving Duo’ can be tailored a plan for both protection and retirement. Smart planning makes time your best partner.
Looking for protection while enjoying tax deductions?
Try our TaxBliss Calculator now and discover how 'AXA WiseGuard Pro Medical Insurance Plan' and 'IncomeBliss Deferred Annuity Plan' can provide you with both!
AXA’s Tax-Saving Duo: Double protection for your health and retirement
AXA IncomeBliss Deferred Annuity Plan features
- Self-funded pension: Start receiving monthly annuity payments as early as age 5014. Enjoy a stable monthly income for an annuity period of up to 20 years8
- Ensure the future well-being of your family: Provide life coverage and dementia advance benefit15
- Annual discount: Enjoy a 5% discount16 every year during the premium payment period, a total premium discount up to 50% of the first year’s annual premium17
- Enhance control with policy currency options: Choose between US dollar and Hong Kong dollar policy currencies
- Tax deduction: Enjoy up to HKD 60,000 in tax deductions3,4
AXA WiseGuard Pro Medical Insurance Plan features
- Coverage for unknown pre-existing condition: We cover pre-existing conditions–those that you don’t know you have at the time of application!
- Guaranteed renewal up to age 10018: With VHIS, your renewal is guaranteed until you are 100 years old.
- Full cover19 for hospitalisation and surgical expenses: Most major items do not impose sub-limits19, and there is no lifetime benefit limit.
- No waiting period: Your coverage starts as soon as your policy becomes effective.
- Multiple coverage options: You will be given a choice of 3 ward classes (general ward, semi-private room and standard private room), 3 geographic regions and 3 levels of annual deductibles.
- Top medical service network20,21: Includes cashless arrangement, second medical opinions, and medical services network in mainland China.
- Savings on tax: Enjoy a maximum annual tax deductible limit of HKD 8,000 per insured person3,6
Subject to terms and conditions. Please refer to the product brochure and promotional materials in the website link for details.
1. Source: Insurance Authority
https://www.ia.org.hk/en/qualifying_deferred_annuity_policy/index.html
2. Source: Health Bureau Voluntary Health Insurance Scheme
https://www.vhis.gov.hk/en/info_centre/faqs.html
3. For details on tax deductions, please refer to the relevant product brochure and visit the website of Inland Revenue Department (IRD) of HKSAR or contact IRD for tax related enquiries.
4. HKD60,000 is the maximum tax deductions per taxpayer per year for qualifying annuity premiums and MPF tax deductible voluntary contributions.
5. Assuming the Hong Kong taxpayer has enrolled in one Qualified Deferred Annuity Policy (QDAP), and the calculation is based on the maximum tax rate of 17% for illustration purposes only. Only the eligible premiums actually paid for the QDAP are tax-deductible. Each taxpayer may claim maximum tax deductions amounts, including QDAP and MPF tax deductible voluntary contributions (TVC) deduction cap of HKD 60,000 per year. For details on tax deductions, please refer to the product brochure and visit the website of Inland Revenue Department, or contact the Inland Revenue Department directly for any tax-related inquiries.
6. HKD8,000 is the maximum tax deductions per taxpayer per year for VHIS policy premiums for each eligible insured person.
7. Assuming the Hong Kong taxpayer has enrolled in one certified Voluntary Health Insurance Scheme (VHIS) plan, and the calculation is based on the maximum tax rate of 17% for illustration purposes only. Only the eligible premiums actually paid for VHIS products are tax-deductible. Each taxpayer may claim maximum tax deductions amounts, including VHIS deduction cap (Per specified relatives insured) of HKD 8,000. For details on tax deductions, please refer to the product brochure and visit the website of Inland Revenue Department, or contact the Inland Revenue Department directly for any tax-related inquiries.
8. Assuming the Hong Kong taxpayer has enrolled in one certified Voluntary Health Insurance Scheme (VHIS) plan and one Qualified Deferred Annuity Policy (QDAP), and the calculation is based on the maximum tax rate of 17% for illustration purposes only. Only the eligible premiums actually paid for the QDAP or VHIS products are tax-deductible. Each taxpayer may claim maximum tax deductions amounts, including QDAP and MPF tax deductible voluntary contributions (TVC) deduction cap of HKD 60,000 per year, and VHIS deduction cap (per specified relatives insured) of HKD 8,000. For details on tax deductions, please refer to the product brochure and visit the website of Inland Revenue Department, or contact the Inland Revenue Department directly for any tax-related inquiries.
9. Worldwide excluding USA shall mean worldwide excluding USA. USA shall mean the United States of America and US Minor Outlying Islands.
10. After the accumulation period, customer can receive monthly annuity payments for a duration of up to 20 years. Please refer to the relevant product brochure for details.
11. The monthly annuity payment will be left with us to accumulate for interest. The interest rate is not guaranteed and shall be determined by the Company from time to time. Withdrawal from the balance of monthly annuity payment accumulated is free of charge.
12. You may request to change your annuity payment option by sending written notice (in such form and manner satisfactory to us) to the Company. The change of annuity payment option is free of charge. Any approved change to the annuity payment option will take effect from the next policy monthiversary.
13. The term "market exclusive" refers to IncomeBliss Deferred Annuity Plan recognised with the 10Life 5-Star Award in QDAP(Growth Income) for 2 consecutive years, while AXA WiseGuard Pro Medical Insurance Plan, which is the only VHIS plan to win the 10Life 5-Star Insurance Award for five consecutive years across all room categories (general ward, semi-private room, and standard private room). Among these, the “Regular” and “Enhance” benefit levels were rated as "5-Star Voluntary Medical Insurance" in the 10Life 5-Star Insurance Award 2026, while the "Premier" and "Noble" benefit levels were rated as "5-Star High-End Medical Insurance."
14. Only applicable to policies with issue age of 18 - 40.
15. Eligibility for the dementia advance benefit is subject to certain criteria and exceptions. The benefit payable under this dementia advance benefit is equivalent to the amount of death benefit payable under IncomeBliss as if the annuitant died on the date of first diagnosis of Severe Dementias. Once this dementia advance benefit becomes payable, the policy will automatically terminate. Please refer to the policy contract for further details.
16. Only qualified annuity premiums paid under IncomeBliss Deferred Annuity Plan can be tax deductible. For the purpose of tax deduction, the premium discount offered by AXA will not be considered as qualified annuity premiums paid.
17. Applicable to policy with a premium payment term of 10 years and subject to terms and conditions. Please refer to product brochure and promotional leaflet for more details.
18. Subject to the terms and benefits of the policy contract, you have a guaranteed right to renew the policy by making payment of the prevailing premium on each policy anniversary.
19. Full cover shall mean no itemised benefit sub-limit and is only applicable to the reimbursement of the actual amount of eligible expenses and / or other expenses charged after deducting the remaining deductible (if any), and is subject to the annual benefit limit and other conditions as stated in the product brochure and the policy contract. Full cover applies to certain benefit items only. Further details of the terms, conditions, exclusions and limitations are provided in the policy contract.
20. The service providers which provide the Network Doctors, Network healthcare facilities, GBA healthcare facilities and Case Manager are independent third parties and are not agents of AXA. AXA shall not have any obligation or liability whatsoever in relation to the medical services and advices provided by the service providers and their Network Doctors, Network healthcare facilities, GBA healthcare facilities and Case Manager and shall not be responsible for any act or failure to act on the part of Network Doctors, Network healthcare facilities, GBA healthcare facilities and Case Manager or its personnel (including doctors, nurses, or other medical staff).
21. The list of Network Doctors, Network healthcare facilities, GBA healthcare facilities and Case Manager are subject to change from time to time at AXA’s sole discretion without prior notice. Hence, the Network Doctors’ and Case Managers’ number of years’ experience and post-fellow specialist training may vary.
The above content is reviewed by Mr Daniel Lau - Head of Wealth Management Training of AXA Hong Kong and Macau.
Insurance plans vary in coverage and are subject to their respective terms and conditions. For detailed coverage of the plan, please refer to the relevant product brochure and policy contract.
No warranty or responsibility is assumed by AXA Hong Kong and our related or holding companies regarding non-infringement, security, accuracy, completeness, adequacy, reasonableness, fitness for a purpose or free from computer viruses in connection with the information and materials provided. AXA Hong Kong and our related companies and holding companies do not accept any liability for any loss, damage, cost or other expense, whether wholly or partially, directly or indirectly, arising from any error, inaccuracy or omission of the information and materials to the extent that such liability is not excluded by law.
"AXA WiseGuard Pro Medical Insurance Plan" and "IncomeBliss Deferred Annuity Plan" is underwritten by AXA China Region Insurance Company (Hong Kong) Limited (“AXA”).
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