Hetao Shenzhen Park to implement 15 pc corporate income tax, HK residents exempted from portion

The financial authorities in China have recently released documents to put into effect a special corporate income tax rate and personal income tax for qualifying companies and Hong Kong residents in the Shenzhen Park of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone.

The catalog of tax incentives for Hetao enterprises focuses on key areas and sectors of technological innovation, including information science and technology, material science and technology, life science and technology, and scientific and technological service institutions.

Eligible enterprises can enjoy a reduced corporate income tax rate of 15 percent, while the rate is generally about 25 percent in China.

Hong Kong residents who work in the Shenzhen Park of the Hetao zone will be exempt from paying personal income tax on the portion that exceeds the tax level in Hong Kong. The exemption will be effective starting from the annual settlement and payment for the year 2023.

The tax for Hongkongers covers comprehensive income, business income, and talent subsidy income recognized by local governments.

The new tax preferential policies are expected to attract more research institutions, enterprises and talents to join the development of the zone, and support the coordinated development of the two cities.

According to the plan of the China's State Council, the zone is being jointly developed by the southern tech hub Shenzhen and the HKSAR, aiming to serve as a key engine of the high-quality development of the Guangdong-Hong Kong-Macao Greater Bay Area.

In Guangdong, the Hengqin-Guangdong-Macao In-Depth Cooperation Zone in Zhuhai and the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone in Shenzhen also provide equivalent tax policies.

(Staff reporter and China Daily)