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China: Individual income tax subsidy available in Greater Bay Area

China: Individual income tax subsidy available

The Department of Finance of Guangdong Province and the Guangdong Provincial tax authority jointly issued Yue Caishui [2019] No. 2 (22 June 2019) as guidance related to an individual income tax subsidy available for certain individuals working in the “Greater Bay Area.”


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Circular 2 (known in English as: Notice on the Implementation of Preferential Individual Income Tax Policy for the Guangdong-Hong Kong-Macau Greater Bay Area) sets out the general framework for determining eligibility and extent of an individual income tax subsidy. The subsidy is available under a policy announced in March 2019 that has been designed to attract foreign persons with “high-end and urgently-needed talent” (including people from Hong Kong SAR, Macau SAR, and Taiwan region) to the Greater Bay Area.

Circular 2 is effective retroactively from 1 January 2019 and applies as a pilot program for one year. It is subject to review and change after completion of the trial period.

Specific subsidy standards

The municipal governments of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing in the Greater Bay Area’s Pearl River Delta will offer a fiscal subsidy with regard to qualified foreign high-end talents and urgently-needed talents working in the nine cities. The subsidy is calculated as the difference between the individual income tax paid on eligible personal income and 15% of the taxable value of the same eligible income. The subsidy is exempt from individual income tax in the People’s Republic of China.

Personal income eligible for subsidy 

The subsidy will be calculated on the individual income tax differentials assessed on the following types of personal income (eligible personal income):

  • Salary and wages
  • Independent personal services income
  • Author’s remuneration
  • Royalties
  • Income from business operations
  • Subsidies awarded to individuals who participate in selected talent programs or projects

For more information, contact a KPMG tax professional:

Linda Zhang | +1 (212) 954-2423 |

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