HONG KONG: Tax & MPF Changes Affecting Employee Retirement Plans
This update provides more information on what employers can do to effectively manage these changes and ensure that there are no surprises in the near term.
- Mandatory reporting requirements to the Inland Revenue Department (IRD) will add further compliance requirements for employers and plan vendors, including the need for clear communication to employees about how their interests may be affected.
- Introduction of the electronic Mandatory Provident Fund (eMPF) infrastructure system aims to standardise and streamline the administration system to enhance cost efficiencies making way for increased retirement savings.
- Removal of the “offsetting” mechanism in the MPF design, expected in 2022, may impact employers’ cost of providing benefits but will enhance the effectiveness of the MPF for individuals.
- From 1 April 2019, taxpayers can enjoy tax deductions of up to HKD 60,000 per year if they make voluntary MPF contributions or pay deferred annuity premiums.
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