{"id":5212,"date":"2023-06-01T10:00:00","date_gmt":"2023-06-01T10:00:00","guid":{"rendered":"http:\/\/ms-advisory.flow-work.online\/?p=5212"},"modified":"2026-04-22T07:10:59","modified_gmt":"2026-04-22T07:10:59","slug":"greater-bay-area-china-tax-subsidy","status":"publish","type":"post","link":"https:\/\/msadvisory.com\/greater-bay-area-china-tax-subsidy\/","title":{"rendered":"Greater Bay Area China Tax Subsidy"},"content":{"rendered":"\t\t
\n\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

To attract high-skilled and urgently needed talents, the Guangdong-Hong Kong-Macao Greater Bay Area<\/a> (GBA) has introduced a preferential individual income tax (IIT)<\/a> policy for foreign talents and qualified talents from Hong Kong, Taiwan, and Macao. Qualified applicants are now able to obtain subsidies to reduce their IIT burden. With the latest round of applications due on June 15, 2024, eligible individuals must get their applications to receive the subsidy for the 2024 tax year<\/strong>.\u00a0<\/p>

In this article, we provide an overview of the rules for the GBA IIT subsidy, how to apply for the subsidy, and whether you or your employees qualify for it. As the laws and regulations differ between the nine cities, the basis for this article is the regulations of the two largest cities, Guangzhou and Shenzhen. When applying for the GBA IIT refund, we suggest having an internal review or consulting a third-party company together with your employer.<\/p>

For all you need to know about doing business in China, download “The Complete Guide to Doing Business in China” for FREE.\u00a0<\/em><\/strong><\/p>

\n \"Cover<\/a>\n
\n

Doing Business in China<\/a><\/h3>\n

Your complete guide to doing business in China \u2014 from company formation and legal…<\/i><\/p>\n Read more \"right\"\"right\"<\/a>\n <\/div>\n <\/div>\n

How Does the Policy Work?<\/h2>

The policy aims to offset differences in the income tax treatment between China and Hong Kong. The 9 cities offering the subsidies to foreign talents include Guangzhou, Shenzhen, Dongguan, Zhuhai, Huizhou, Zhaoqing, Jiangmen, Foshan and Zhongshan. Each city government set up its own application processes as well as requirements for qualifying as high-skilled and urgently needed talent.<\/p>

It is important to check whether the scheme is up-and-running in your individual location. For example, it is now operational<\/a> for individuals working in Shenzhen<\/a>.\u00a0<\/p>

It is important to note that the policy does not decrease the IIT that is paid at the source on a monthly basis. During the fiscal year, the individual will be required to pay IIT according to the relevant IIT laws and regulations. At the end of the fiscal year, and after the annual IIT settlement<\/a> is completed, individuals will then be able to apply for a subsidy in the form of an IIT rebate. The rebate is calculated as the difference between the actual IIT paid by the individual and 15% of the individual\u2019s taxable income. As such, this effectively means the individual receives a rebate over the amount of tax paid, in excess of 15%.<\/p>\t\t

\n\t\t\t\t\t\t
\n\t\t\t\t\t
\"Harm-Hoonstra\"<\/a><\/figure>
Ask your questions to our experts<\/a><\/div>

Send us your question and we will answer within 24 hours.\n\nMessage  \u2192<\/span><\/p><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

Calculation of the Subsidy<\/h2>

If foreign talents qualify in 1 of the 2 categories, they have the opportunity to apply to receive the subsidy, which in general limits the individual tax rate to 15%. If an applicant receives approval of his\/her application, the individual will receive the tax-exempt subsidy that is calculated as follows:<\/p>

Subsidy amount = amount of tax paid (in one of the nine cities) – taxable income * 15%<\/em><\/p>

If an individual receives other types of income in addition to their comprehensive income (such as wages, salary, labor compensation, remuneration and royalties), the subsidy is calculated separately for each type of income and is later transferred as a lump sum. Other types of income can be operating income or subsidized income from talent sponsorships. To calculate the subsidy amount for each income type, the formula is as follows:<\/p>

Subsidy amount = \u2211 amount of tax paid per income type (in one of the nine cities) – taxable income per income type * 15%<\/p>

\"Tax<\/a><\/p>

Who Qualifies as Foreign Talent<\/h2>

General requirements for Foreign Talents<\/h3>

Foreign nationals, permanent residents in Hong Kong, Taiwan or Macao, as well as Chinese citizens who have returned from overseas (who have the right of long-term residence abroad) can apply to receive the subsidy (exemptions are possible).<\/p>

In terms of employment, the applicant must work for or be employed by an enterprise or institution registered in 1 of the 9 cities during the tax year. Alternatively, individuals can also apply for the subsidy if they provide independent personal services in the specific city.<\/p>

Applicants are further required to have a clear record for at least 3 years prior to the application, in terms of tax violations, false reporting, etc. Additionally, the applicant needs to have paid IIT according to the law and needs to hold a Chinese bank account.<\/p>

Additional requirements per city can also be applicable, such as minimum working days in the municipality or other income requirements. For example, applicants from Guangzhou must work in the city for at least 90 days during the applicable fiscal year. If an applicant stays in the municipality fewer than 24 hours, it is counted as half a day when calculating the number of working days there.<\/p>

Requirements for High-Skilled or Urgently Needed Talents<\/h2>

Qualifying as a high-skilled talent or urgently needed talent, the following general requirements can be listed:<\/p>