GBA Income Tax Subsidy 2023: Eligibility, Updates, and Application Process

GBA Income Tax Subsidy 2023: Eligibility, Updates, and Application Process

Introduction:

The flagship individual income tax (IIT) policy for foreign talent in China's Guangdong-Hong Kong-Macao Greater Bay Area (GBA) has officially resumed in 2023, following a temporary halt in 2022. The Guangdong provincial authorities have announced the return of the policy, and Guangzhou has released a draft document outlining the updated requirements for foreign talent to benefit from the subsidy. In this article, we explore the details of the GBA income tax subsidy and the recent changes to Guangzhou's eligibility standards.

Overview of the GBA Income Tax Subsidy:

The GBA IIT subsidy, initiated in 2019 by China's Ministry of Finance (MOF) and State Tax Administration (STA), aims to attract high-end and in-demand talent from overseas to the GBA. Under this policy, eligible foreign talent can receive a subsidy from the local government for the portion of IIT paid on their taxable income exceeding 15 percent. The subsidy is capped at RMB 5 million (approx. US$691,266) per taxpayer per tax year.

Resumption of the GBA Income Tax Subsidy:

After a hiatus in 2022 due to tight fiscal policies and COVID-19 prevention measures, the Guangdong Provincial Department of Finance has issued a notice to the municipal governments of the nine mainland GBA cities, officially restarting the procedures for the subsidy in 2023.

Latest Updates in Guangzhou:

The Guangzhou municipal government has released a draft amendment of its 2021 measures for the implementation of the GBA IIT policy. This draft outlines specific eligibility requirements and other details for the subsidy. Feedback on the document is currently being solicited until July 5, 2023. While the application acceptance date has not been announced yet, Guangzhou is expected to provide further guidelines in due course.

Eligibility Criteria for the GBA Income Tax Subsidy:

To be eligible for the GBA IIT subsidy, applicants must meet certain requirements, irrespective of the city they apply from. These include being a permanent resident of Hong Kong, Macau, Taiwan, a foreign national, a mainland Chinese returnee, or an overseas Chinese with long-term residence abroad. Applicants must work and pay taxes in one of the nine mainland GBA cities and abide by relevant laws, regulations, and ethical standards. Furthermore, they must possess talent in fields such as scientific and technological innovation, key development industries, and philosophy and social sciences, as specified in the catalogs of overseas high-end talents and talents in short supply for each city.

Guangzhou's Eligibility Requirements:

In addition to the Guangdong-wide criteria, Guangzhou has additional requirements for both "overseas high-end talent" and "overseas in-demand talent." These requirements include working or being employed by an enterprise or institution registered in Guangzhou, spending over 90 days working in Guangzhou per tax year, paying IIT in Guangzhou, and meeting the respective high-end or in-demand talent catalog criteria.

Calculating the GBA Income Tax Subsidy:

The financial subsidy for IIT is calculated based on the tax burden difference of each income item and tax year, multiplied by the proportion of tax already paid. The tax burden difference varies depending on the type of income and the applicant's residence status. Specific calculations are provided in the article.

Application Process for the GBA Income Tax Subsidy:

Applications for the GBA IIT subsidy are processed once a year, with retroactive applications for previous tax years

 accepted. Applicants need to submit required documents, including proof of employment, tax payment certificates, talent identification documents, and other supporting materials. The application must be filed through an online platform designated by the local tax authorities.

The flagship individual income tax (IIT) policy for foreign talent in China's Guangdong-Hong Kong-Macao Greater Bay Area (GBA) has officially resumed in 2023, following a temporary halt in 2022. The Guangdong provincial authorities have announced the return of the policy, and Guangzhou has released a draft document outlining the updated requirements for foreign talent to benefit from the subsidy. In this article, we explore the details of the GBA income tax subsidy and the recent changes to Guangzhou's eligibility standards.

 

Overview of the GBA Income Tax Subsidy:

The GBA IIT subsidy, initiated in 2019 by China's Ministry of Finance (MOF) and State Tax Administration (STA), aims to attract high-end and in-demand talent from overseas to the GBA. Under this policy, eligible foreign talent can receive a subsidy from the local government for the portion of IIT paid on their taxable income exceeding 15 percent. The subsidy is capped at RMB 5 million (approx. US$691,266) per taxpayer per tax year.

Resumption of the GBA Income Tax Subsidy:

After a hiatus in 2022 due to tight fiscal policies and COVID-19 prevention measures, the Guangdong Provincial Department of Finance has issued a notice to the municipal governments of the nine mainland GBA cities, officially restarting the procedures for the subsidy in 2023.

Latest Updates in Guangzhou:

The Guangzhou municipal government has released a draft amendment of its 2021 measures for the implementation of the GBA IIT policy. This draft outlines specific eligibility requirements and other details for the subsidy. Feedback on the document is currently being solicited until July 5, 2023. While the application acceptance date has not been announced yet, Guangzhou is expected to provide further guidelines in due course.

Eligibility Criteria for the GBA Income Tax Subsidy:

To be eligible for the GBA IIT subsidy, applicants must meet certain requirements, irrespective of the city they apply from. These include being a permanent resident of Hong Kong, Macau, Taiwan, a foreign national, a mainland Chinese returnee, or an overseas Chinese with long-term residence abroad. Applicants must work and pay taxes in one of the nine mainland GBA cities and abide by relevant laws, regulations, and ethical standards. Furthermore, they must possess talent in fields such as scientific and technological innovation, key development industries, and philosophy and social sciences, as specified in the catalogs of overseas high-end talents and talents in short supply for each city.

Guangzhou's Eligibility Requirements:

In addition to the Guangdong-wide criteria, Guangzhou has additional requirements for both "overseas high-end talent" and "overseas in-demand talent." These requirements include working or being employed by an enterprise or institution registered in Guangzhou, spending over 90 days working in Guangzhou per tax year, paying IIT in Guangzhou, and meeting the respective high-end or in-demand talent catalog criteria.

Calculating the GBA Income Tax Subsidy:

The financial subsidy for IIT is calculated based on the tax burden difference of each income item and tax year, multiplied by the proportion of tax already paid. The tax burden difference varies depending on the type of income and the applicant's residence status. Specific calculations are provided in the article.

Application Process for the GBA Income Tax Subsidy:

Applications for the GBA IIT subsidy are processed once a year, with retroactive applications for previous tax years not being accepted. Interested applicants are required to submit relevant documents through an online platform designated by the local tax authorities. These documents may include proof of employment, tax payment certificates, talent identification documents, and other supporting materials. It is advisable to consult with tax advisors and prepare the necessary documents in advance of the application acceptance date.

Conclusion:

The resumption of the GBA IIT subsidy in 2023 is expected to attract more foreign talent to the GBA and enhance the region's competitiveness. As Guangzhou releases its draft amendment, outlining the updated eligibility requirements, it is crucial for interested individuals to stay informed and prepare necessary documents for the application process. Foreign talent seeking to benefit from the subsidy should consult with tax advisors and stay tuned for further guidelines from the local tax authorities.

The resumption of the GBA IIT subsidy in 2023 is expected to attract more foreign talent to the GBA and enhance the region's competitiveness. As Guangzhou releases its draft amendment, outlining the updated eligibility requirements, it is crucial for interested individuals to stay informed and prepare necessary documents for the application process. Foreign talent seeking to benefit from the subsidy should consult with tax advisors and stay tuned for further guidelines from the local tax authorities.

DISCLAIMER: This article is for informational purposes only and should not be considered as legal, financial, or tax advice. Please consult with professionals for specific advice tailored to your circumstances.This article is for informational purposes only and should not be considered as legal, financial, or tax advice. Please consult with professionals for specific advice tailored to your circumstances.