Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Greater Bay Area Releases Detailed Plan on IIT Incentives for Overseas Talents

The Greater Bay Area officially announced detailed rules for the implementation of preferential individual income tax (IIT) policy for overseas talents.

Eligible overseas talents working in nine cities in the region can enjoy a preferential tax rate of 15 percent – in line with the Hong Kong IIT rate. China Briefing explains the policy introduced.

To support the smooth implementation of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) plan and attract overseas talents to work in this region, China has rolled out measures to grant subsidies to overseas high-end and critically-lacking talents (including Hong Kong, Macau, and Taiwanese residents or “HKMT residents”).

On March 14, 2019, China’s Ministry of Finance (MOF) and State Administration of Taxation (SAT) jointly released Cai Shui [2019] No.31 (“Circular 31”). The circular allows eligible overseas talents to receive government subsidies to offset differences in the individual income tax (IIT) burden between mainland China and other regions. The plan will last for five years and end on December 31, 2023.

On June 22, Guangdong province released Yue Cai Sui [2019] No.2 (“GD Notice 2”), which sets out the main criteria and principles for implementing the preferential IIT policy, including the requirements of applicants and the standard and scope of differential subsidies.

The “GD Notice 2” will be retroactively implemented from January 1, 2019 for a trial period of one year. Although the notice itself was announced in June, the subsidy will be calculated based on the taxable income for one year, from January 1 to December 31, 2019.
What’s the subsidy and how to calculate it?

The subsidy will apply to nine cities across the Pearl River Delta region: Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing.

he local governments of these nine cities will provide the subsidies for eligible talents working in the respective city; the subsidies will absorb the IIT difference between the mainland and Hong Kong, which enjoys a lower income tax rate.

The IIT system of Hong Kong currently adopts a five-level progressive rate (two, six, 10, 14, or 17 percent) or a standard rate (15 percent). For the convenience of practical operation, the Chinese government will use the standard tax rate of 15 percent. Thus, the actual amount of IIT that the eligible person needs to pay will be 15 percent of their taxable income.

Therefore, to calculate the IIT difference or the amount of subsidy, the formula is:



The subsidy amount = the amount of IIT paid in those nine cities – taxable income × 15%

Based on this formula, Shenzhen’s vice mayor Wang Lixin gave a rough estimate that a talent with an annual salary of RMB 1 million (US$150,000), who would have paid IIT of up to RMB 450,000 (US$65,573) in the mainland, may now only need to pay IIT of RMB 150,000 (US$21,858).
What is considered taxable income under the IIT policy?

Pursuant to the “GD Notice 2”, the IIT paid in the nine cities cover:

    Salaries and wages;
    Income from provision of independent person services;
    Income from author’s remuneration;
    Income from royalties;
    Income from operations; and
    Subsidized income from selected talent projects or talent programs.

To clarify the IIT payment of overseas talents (including “HKMT residents”), you can refer to our guide on China’s IIT rules to understand rules on foreign workers’ tax residency in China and the IIT calculation methods, or refer to the government’s original documents – Announcement 34 (Announcement on the Criteria for Determining the Residence Time of Individuals without Domicile in China) and Announcement 35 (Announcement on Individual Income Tax Policies for Non-resident Individuals and Non-domiciled Resident Individuals).
Who are eligible?

Overseas talents working in the above-mentioned nine cities and paying taxes as required by law in the local city are eligible for the subsidy. They may be:

    Permanent residents of Hong Kong or Macau;
    Hong Kong residents who came to Hong Kong through the Hong Kong entry scheme for talents, professionals, and entrepreneurs;
    Residents of Taiwan;
    Foreign nationalities; or
    Overseas students and overseas Chinese who have obtained the right of long-term residence abroad.

Moreover, applicants need to fit the basic definition of “high-end” and “critically-lacking” talents according to the “GD Notice 2”. They should be:

    A candidate of the state, provincial, or municipal major talent projects who has obtained a high-level talent’s card of Guangdong province or a Foreigner’s Work Permit (Class A) or a confirmation letter of a foreign high-end talent, as well as other overseas high-end talents recognized by the state, provincial, and municipal authorities; or
    A scientific and research team member of a major innovation platform of the state, provincial, or municipal level, or of a higher education institution, scientific and research institution, hospitals, or other relevant institutions, or a technical skills backbone and an excellent managerial personnel working or starting out his/her own business in a key industry or a key field within the Guangdong Province, or any other critically lacking talent with special expertise recognized by the nine municipal authorities within the GBA.

More specific identification standards and operative measures are left to the nine municipal governments to formulate, according to their respective local conditions.

The applicant or employer can submit the application to the local financial department once the application procedures are announced.

If approved, the subsidy will be consolidated and granted to the talent once a year. If a talent obtains the subsidies from two or more places, such subsidies shall be reasonably shared by the relevant local governments.

The eligible talents and their employers are advised to monitor the follow-up local notices and apply for the subsidies in time after the practical measures are introduced.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
×