Mandatory Provident Fund for Taxation in Hong Kong
1. Who are responsible for mandatory contributions?
Samples with a value below HKD1000 may not be declared, but please keep the relevant invoices. The government can ask you the reason for not declare within 2 years.
Samples with a value of HKD1000 or above must be declared.
If it is not a sample, customs declaration is required regardless of the value of the goods.
2. Are the contributions made by employee to an MPF scheme deductible under Salaries Tax?
Employee can claim a tax deduction under Salaries Tax for the mandatory contributions that he makes to an MPF scheme. The maximum deductible amount should not exceed the amount prescribed in the Inland Revenue Ordinance (Maximum deduction HK$18,000 for the year of assessment 2015/16 onwards).
3. How about the mandatory contributions are contributed over 5% for monthly salary?
Any contributions exceeding 5% of your salary would be regarded as voluntary contributions to the MPF scheme and not deductible for tax purposes.
4. A person is employed by two or more companies during the year of assessment 2020/21. Can he claim the aggregate of his mandatory contributions made to each MPF scheme under Salaries Tax?
Employee can claim deduction for the mandatory contributions which he makes to different MPF schemes. However, irrespective of the amount of mandatory contributions and the number of MPF schemes the employee has contributed to, the maximum amount of deduction that he can claim is restricted to $18,000 for year of assessment 2020/21. Any contributions exceeding this limit will not be deductible.
5. Director’s remuneration is subject to mandatory contributions?
An executive director receiving a salary under a contract of employment is required to join a MPF scheme and is entitled to claim tax deduction for his mandatory contributions. The deduction shall not exceed the maximum deductible amount for the relevant year. A director who receives director’s fees as an office holder is not an employee and is not required to participate in MPF scheme.
Source: Inland Revenue Department – https://www.ird.gov.hk/eng/welcome.htm
Mandatory Provident Fund Schemes Authority – https://www.mpfa.org.hk/en
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