Cross-border Taxation: Individual Income Tax Benefits in Guangdong, Hong Kong and Macau?

For many Hong Kong residents, working in the Mainland has become a common practice. The Guangdong, Hong Kong and Macao Greater Bay Area (GBA) Individual Income Tax Concession is a good example. Can this policy really bring tax relief to professionals and senior talents from Hong Kong, Macau and Taiwan? In this article, we will analyze this tax policy in depth and guide readers on how to take advantage of this opportunity to plan their career development and tax strategies.

What is the tax policy for Hong Kong residents working in the Mainland?

According to the tax law of the People’s Republic of China, any foreigner who has resided in Mainland China for more than one year is required to file an individual income tax return on his/her worldwide income in China.

However, due to the dual tax treaties between Hong Kong and China, the tax implications for Hong Kong residents working in the Mainland may be different. If you work in the Mainland for not more than 183 days, then you only need to file tax returns for income earned in the Mainland. However, if you work in the Mainland for more than 183 days, you may need to file a tax return for worldwide income.

Individual Income Tax Concessions in the Guangdong, Hong Kong and Macao Bay Area

The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) is a major strategic plan of the Chinese government, which aims to promote the economic integration and regional development of Guangdong Province, Hong Kong and Macao. In terms of tax policy, GBA also has some preferential personal income tax policies to attract professional talents.

Pursuant to the announcement of the Ministry of Finance and the General Administration of Taxation of the PRC, “Guangdong, Hong Kong and Macao Greater Bay Area Individual Income Tax Preferential Policies”, from January 1, 2019 to December 31, 2023, high-end talents and talents in short supply from Hong Kong, Macao and Taiwan working in the GBA will receive a subsidy equivalent to the difference in individual income tax between the Mainland and Hong Kong, which is applicable to nine cities of the Guangdong Province, including:

Guangzhou

Shenzhen

Zhuhai

Foshan

Huizhou

Dongguan

Zhongshan

Jiangmen

Zhaoqing

How can I get the Greater Bay Area tax subsidy?

The Guangzhou Municipality’s announcement “On the Implementation of the Individual Income Tax Preferential Policies of Guangdong, Hong Kong and Macao Greater Bay Area” specifies that the subsidy can be obtained by

Meet the following basic conditions:

be a permanent resident of Hong Kong or Macao

or Hong Kong residents who have obtained the Hong Kong Immigration Scheme

or a resident of Taiwan

or a foreign national

or returnees and overseas Chinese who have obtained the right of long-term residence in a foreign country.

In addition, the applicant must work and pay taxes in one of the nine cities mentioned above, and must abide by laws and regulations, research ethics and research integrity.

The applicant must also meet one of the following conditions:

Be selected for the national, provincial or municipal talent programs.

Holders of Guangdong Province’s “Talent Preferential Card”.

Foreign Work Permit (Type A) or Confirmation Letter for Foreign High-end Talents

Other high-level talents from abroad recognized by the state, province or municipality.

Scientific research team members of major innovation platforms in the country, province or city, and scientific research and technology team members in institutions of higher education, scientific research institutes, hospitals and other related organizations.

Technical and technological backbones and outstanding management talents who are engaged in entrepreneurship in key development industries and key fields in Guangdong Province.

Or talents with special expertise recognized by the nine cities as being in short supply and in urgent need.

The specific implementation of these criteria will be formulated by each city in accordance with its specific situation. The above information is for reference only. If you have any questions or would like to enquire about filing tax returns (personal tax return, corporate tax return, accountant’s tax return), you are welcome to contact our professional consultants and we will provide you with a free quote and consultation service in due course.