For many residents of Hong Kong, taking up employment in the Mainland has become increasingly common. A notable initiative in this context is the Guangdong, Hong Kong, and Macau Greater Bay Area (GBA) Individual Income Tax Concession. This policy raises the question: can it truly provide tax relief for professionals and senior talents from Hong Kong, Macau, and Taiwan? This article delves into the details of this tax policy and offers insights on how to leverage it for career development and effective tax planning.
Understanding the Tax Policy for Hong Kong Residents in the Mainland
Under the tax regulations of the People's Republic of China, any foreign national residing in Mainland China for over one year is obliged to file an individual income tax return that includes worldwide income. However, due to the existence of double tax treaties between Hong Kong and China, the tax obligations for Hong Kong residents working in the Mainland may vary. If a resident works in the Mainland for less than 183 days, they are only required to report income earned within Mainland China. Conversely, if the duration exceeds 183 days, they may be required to declare their worldwide income.
Individual Income Tax Concessions in the GBA
The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) represents a significant strategic initiative by the Chinese government aimed at enhancing economic integration and regional development among Guangdong Province, Hong Kong, and Macau. From a tax perspective, the GBA offers several preferential individual income tax policies designed to attract skilled professionals.
According to the Ministry of Finance and the General Administration of Taxation of the PRC, the “Individual Income Tax Preferential Policies for the Guangdong, Hong Kong, and Macao Greater Bay Area” provide that from January 1, 2019, to December 31, 2023, high-level talents and those in short supply from Hong Kong, Macau, and Taiwan working in the GBA can receive a subsidy equal to the tax difference between the Mainland and Hong Kong. This policy applies to nine cities in Guangdong Province, including:
· Guangzhou
· Shenzhen
· Zhuhai
· Foshan
· Huizhou
· Dongguan
· Zhongshan
· Jiangmen
· Zhaoqing
How to Access the GBA Tax Subsidy
The announcement from the Guangzhou Municipality regarding the “Implementation of the Individual Income Tax Preferential Policies of Guangdong, Hong Kong, and Macao Greater Bay Area” outlines the criteria to obtain the subsidy. Applicants must meet the following basic qualifications:
· Be a permanent resident of Hong Kong or Macau
· Holders of the Hong Kong Immigration Scheme
· Residents of Taiwan
· Foreign nationals
· Returnees or overseas Chinese with long-term residence rights abroad
Additionally, applicants must work and pay taxes in one of the aforementioned nine cities and comply with relevant laws, regulations, and research ethics.
Candidates must also satisfy at least one of the following conditions:
· Selection for national, provincial, or municipal talent programs
· Hold a “Talent Preferential Card” from Guangdong Province
· Possess a Foreign Work Permit (Type A) or a Confirmation Letter for Foreign High-end Talents
· Be recognized as high-level talents by state, provincial, or municipal authorities
· Be part of scientific research teams on major innovation platforms or in higher education institutions, research institutes, or hospitals
· Serve as key technical and managerial talents in entrepreneurship within pivotal industries in Guangdong
· Be recognized as having special expertise in high-demand fields by the nine cities
Each city will establish specific criteria based on its unique circumstances. The above information is for reference only. For any inquiries or assistance with tax filings (personal tax returns, corporate tax returns, or accounting services), please feel free to contact our professional consultants. We are here to provide you with a complimentary quote and consultation.
