Recently, the Ministry of Finance and State Administration of Taxation of the PRC released the Circular on Preferential Enterprise Income Tax Policies in Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone (Caishui [2024] No. 13) and the Circular on Preferential Individual Income Tax Policies in Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone (Caishui [2024] No. 12), which adjusting the preferential policies for enterprise income tax and individual income tax in Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone respectively. The detailed adjustments are as follows:
Preferential Enterprise Income Tax Policy
A reduced enterprise income tax rate of 15% for qualified enterprises shall be applied to all regions of the expanded Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone (with a total area of 12.56 square kilometers).
Before the adjustment, the reduced enterprise income tax rate of 15% for qualified enterprises was confined to the original Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone with a total area of 14.92 square kilometers.
Preferential Individual Income Tax Policy
Hong Kong residents working in Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone are entitled to the following preferential individual income tax treatment:
(1) The individual income tax burden exceeding that of Hong Kong will be exempted.
(2) The above individual income tax exemption shall apply to the consolidated income (including salaries and wages, remuneration for personal service, author’s remuneration and royalties) that derived from Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone, operating income that derived from Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone and any talent related subsidy income recognized by the local government.
(3) The above preferential individual income tax policy shall be applied to all regions of the expanded Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone.
(4) The above preferential individual income tax policy shall be adopted in the annual individual income tax filing in Qianhai Shenzhen-Hong Kong Modern Services Industry Cooperation Zone.
The updated preferential enterprise income tax policy and preferential individual income tax policy shall be implemented from 1 January 2023 to 31 December 2025.
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