Tax Deduction for Assisted Reproductive (AR) Service Expenses

To promote fertility, the Chief Executive proposed in his 2023 Policy Address to provide deduction for expenses on AR services under salaries tax and personal assessment starting from the year of assessment 2024/25, subject to the ceiling of $100,000 per year of assessment.

The Inland Revenue (Amendment) (Tax Deductions for Assisted Reproductive Service Expenses) Bill 2024 was gazetted on 29 November 2024. Subject to the passage of the bill, the implementation framework of the new deduction will be as follows:

Effective date

The tax deduction applies to the year of assessment 2024/25 and to all subsequent years of assessment.

Eligibility for deduction

A taxpayer, chargeable to salaries tax or with tax charged under personal assessment, may claim deduction for qualifying AR service expenses paid by him / her or his / her spouse (not living apart) or both of them for receiving qualifying AR services.

The qualifying AR service expenses must be paid by:

the taxpayer;
the taxpayer’s spouse (not living apart); or
the taxpayer and the taxpayer’s spouse (not living apart)

The person who received or is to receive the qualifying AR services must be:

the taxpayer;
the taxpayer’s spouse; or
the taxpayer and the taxpayer’s spouse

Qualifying AR services

Only a taxpayer who received or is to receive AR services for medical reasons is eligible for the tax deduction. Under the existing regulatory regime on AR services under the Human Reproductive Technology Ordinance (Cap. 561) (HRTO), the following persons may receive AR services on medical reasons:

(a)	infertile couples or persons under specified circumstances; and
(b)	cancer patients, or any other patients, who may be rendered infertile as a result of chemotherapy, radiotherapy, surgery or other medical treatment.

The specified circumstances include:

(i)	couples permitted to receive sex selection of embryos under the conditions set out in section 15(3) of the HRTO; and
(ii)	persons continuing to receive a reproductive technology procedure where gametes were, or an embryo was, placed in the body of a woman when they were the parties to a marriage pursuant to the procedure, as described in section 15(7) of the HRTO.

A taxpayer who received or is to receive the following for medical reasons are qualifying AR services:

Reproductive technology (RT) procedures defined under section 2(1) of the HRTO that are provided in licensed centres (including a medical service related to such an RT procedure); or
Handling, storing and disposing of gametes or embryo (used or intended to be used in connection with an RT procedure) provided in licensed centres.

A medical service is related to an RT procedure if

it is a medical service that is directly related to the RT procedure;
it is provided before the RT procedure is to be provided, or during or after the RT procedure is provided; and
it is provided, prescribed or referred by a registered medical practitioner who holds any clinical responsibility for the recipient in respect of the RT procedure.

RT procedure

Under section 2(1) of the HRTO, RT procedure means a medical, surgical, obstetric or other procedure (whether or not it is provided to the public or a section of the public) assisting or otherwise bringing about human reproduction by artificial means, and includes—

(a)	in vitro fertilization;
(b)	artificial insemination;
(c)	the obtaining of gametes;
(d)	manipulation of embryos or gametes outside the body;
(e)	a procedure specified in a notice under subsection (2)(a)(ii) to be an RT procedure; and
(f)	a gender selection achieved or intended to be achieved by means of a procedure which falls within this definition,

but excludes a procedure specified in a notice under subsection (2)(b)(ii) not to be an RT procedure.

Licensed Centres

In accordance with the HRTO, no person shall carry on the following activity except pursuant to a licence granted by the Council on Human Reproductive Technology (CHRT):

the provision of an RT procedure
the handling, storing or disposing of a gamete or embryo used or intended to be used in connection with an RT procedure or embryo research

Licensed centres are those centres which are regulated under the HRTO and hold the following licence issued by the CHRT:

an artificial insemination by husband (AIH) licence;
a treatment licence; or
a storage licence

You may visit CHRT’s website for the list of licensed centres and introduction of each class of licence.

Qualifying AR service expenses

Any expenses payable for receiving a qualifying AR service.

Amount of Allowable Deduction

The AR service expenses paid in a year of assessment is allowable for deduction in that year of assessment.

In general, the maximum amount allowable to a taxpayer for a year of assessment is $100,000 (deduction ceiling).

The amount of deduction allowable to a taxpayer is the amount of expenses paid in the year of assessment, or the deduction ceiling for that year of assessment, whichever is the lesser.

Claim of Deduction by Married Persons

A married taxpayer may claim deduction for qualifying AR service expenses paid by him / her or his / her spouse (not living apart), but expenses already claimed by his / her spouse should be excluded.

If the taxpayer is married, the total amount of deduction allowable to the taxpayer or the taxpayer’s spouse or both of them is the aggregate amount of expenses paid in the year of assessment, or the deduction ceiling of $100,000 for the year of assessment, whichever is the lesser. The taxpayer and the taxpayer’s spouse are free to decide how to allocate the amount of deduction claimed.

Notwithstanding the marital status of a taxpayer is changed during a year of assessment, the amount of deduction allowable to the taxpayer or the taxpayer’s spouse or both of them should not exceed $100,000.

Refund or reimbursement

If the refund / reimbursement is made before a taxpayer claims deduction for qualifying AR service expenses paid, he / she can only claim the reduced amount of the expenses paid. If the refund / reimbursement is made after a taxpayer has claimed the tax deduction, he / she must notify the Commissioner in writing of the refund / reimbursement within 3 months after the date of refund / reimbursement. If the tax deduction has been allowed, an additional assessment will be made on the taxpayer to withdraw the deduction.

It may result in penalties if a taxpayer fails to notify the Commissioner in writing of the refund or reimbursement within the specified period without reasonable excuses. Fine or additional tax may be imposed in respect of the undercharged amount.

Supporting Documents

A taxpayer has to request a registered medical practitioner of a licensed centre who holds clinical responsibility for the RT procedure received to sign and issue a standard form of proof for qualifying AR service expenses (the Proof) to certify: (a) the amount of expenses paid; (b) the date of payment of those expenses; and (c) the eligibility for tax deduction.

Before the passage of the relevant bill, a taxpayer who intends to claim tax deduction for qualifying AR service expenses paid on or after 1 April 2024 should retain the relevant receipt so that he / she can obtain the Proof from the relevant licensed centre after the passage of the bill.

When a taxpayer files the tax return, he / she need not attach documents to support his / her claim. However, he / she should retain the Proof for 6 years after the expiration of the relevant year of assessment for verification when required.

Further Information

More information on the deduction for AR service expenses is available through the following links:

Frequently asked questions

You may visit following links for more information on human reproductive technology: