close
Share with your friends

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.”

1000

Related content

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 | lindazhang@kpmg.com

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal