Wednesday, January 5, 2022
Authorities in Hong Kong have launched a review into two tax-deductible retirement savings products: Qualifying Deferred Annuity Policies (QDAP) and Mandatory Provident Fund (MPF) Tax-Deductible Voluntary Contributions (TVC).
The Insurance Authority (IA), the Mandatory Provident Fund Schemes Authority (MPFA) and the Hong Kong Monetary Authority (HKMA) are undertaking a joint mystery shopping program to better understand how these products are being marketed. The Government said the exercise is the first of its kind jointly conducted by the three financial regulators.
Launching the review, the Government said: "Since the Assessment Year 2019-20, the Government has introduced tax deductions under salaries tax and personal assessment to encourage taxpayers to purchase QDAP or make TVC for their retirement savings. As intermediaries play a significant role in assisting taxpayers in making the choice of QDAP and TVC, the three financial regulators would like to better understand their selling practices through the initiative. The [exercise's] findings will be used to complement the policies and regulatory work of the three regulators and assess the extent to which relevant statutory and regulatory objectives are met."