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Shenzhen unveils tax guidelines for foreign expats in high-demand sectors: A detailed overview

Writer: Song Yingwen  |  Editor: Zhang Zeling  |  From: Shenzhen Daily  |  Updated: 2024-08-30

In a recent notification, guidelines for the declaration for the 2023 personal income tax financial subsidy of Shenzhen's overseas top talent and urgently-needed talent have been released. The notice is jointly issued by the Finance Bureau of Shenzhen Municipality, the Human Resources and Social Security Bureau of Shenzhen Municipality, the Science, Technology and Innovation Bureau of Shenzhen Municipality, and the Shenzhen Tax Service, State Taxation Administration.

The applicants or the company they work for should finish verifying and submitting the application by June 15.


Here are the main points of the guideline:


I. Who can apply for the subsidy:

Applicants for this subsidy must meet one of the following identity conditions:

1. Permanent residents of Hong Kong or Macao, verified with permanent residency identity cards and the "Mainland Travel Permit for Hong Kong and Macao Residents."


2. Hong Kong residents under the Hong Kong migrant admission schemes (talents, professionals, and entrepreneurs excluding dependents), proven with Hong Kong resident identity cards, mainland resident identity cards, and relevant entry documents issued by the Hong Kong Immigration Department.


3. Taiwan residents with a "Mainland Travel Permit for Taiwan Residents."


4. Foreign nationals holding valid passports and visa documents or foreign permanent resident ID cards.


5. Returnees with long-term foreign residence rights, supported by Chinese passports, mainland resident identity cards, foreign long-term or permanent residence certificates, and educational qualifications certified by the Chinese Service Center for Scholarly Exchange. Supplementary documents may include certificates of long-term or permanent residency rights issued by the Chinese embassy or consulate in the country of residence, or notarized certificates and residency records from the country's embassy or consulate in China.


6. Overseas Chinese needing to provide their Chinese passport, mainland resident identity card,proof of foreign residence, exit and entry records, and potentially additional documents like residency certificates or records issued by Chinese embassies or consulates abroador notarized certificate and residency records issued by the embassy or consulates of their country of residence in China.


The validity of the identity documents mentioned above must be within the tax year to qualify.


II. Working conditions of applicants:

1. The applicant must work in Shenzhen and meet one of the following conditions:

1. Have signed a labor (employment) contract with an employer in Shenzhen.


2. Dispatched by an overseas employer, with the overseas employer having a dispatch contract with an entity in Shenzhen.


3. Providing independent personal services and have signed a service contract with a tax-paying entity in Shenzhen.


2. The applicant must work in Shenzhen, pay personal income tax in accordance with the law, and has accumulatively worked for over 90 days (excluding 90 days) in Shenzhen within a tax year.


3. If the applicanthas changed jobs and is applying for the personal income tax financial subsidy for overseas top talent and urgently-needed talent, and has worked for a cumulative total of over 90 days in an institution that meets the application conditions during the tax year, the applicant can apply through the institution, which should cooperate accordingly.


III. Eligibility criteria for applicants

1. Overseas high-level talents:

This refers to those who meet one of the following criteria and work in the fields of scientific innovation, key industries, or philosophy and social sciencesin Shenzhen:


(1)Selected for national, provincial, or municipal major talent projects.


(2)Recognized as overseas high-level talents by the national, provincial, or municipal authorities.


(3)Hold the "Guangdong Talent Card."


(4)Hold the Shenzhen "Pengcheng Talent Card."


(5)Hold a Class A "Foreigner's Work Permit in China" (excluding those applying for Class A "Foreigner's Work Permit in China" based on the criterion of "average salary not less than 6 times the previous year's average social salary in Shenzhen").


(6)Hold a "Confirmation Letter for Foreign High-level Talents,""Confirmation Letter for Foreign High-level Talents in Guangdong Province," or "Confirmation Letter for High-level Talents of Hong Kong, Macao or Taiwan in Guangdong Province."


The above provisions are based on certificates or relevant identification documents issued by national, provincial, or municipal government departments. The validity period of the related certificates is not considered a restriction for application (except for revoked ones).


Here “related fields” refer to:

(1)Field of scientific innovation: National, provincial, or municipal major innovation platforms;Higher education institutions, research institutes, medical institutions, public health institutions;High-tech enterprises, "specialized and innovative" enterprises, top manufacturing industry companies.


(2)Key industries: Strategic emerging industries, future industries;Modern service industry.


(3)Philosophy and social sciences: Research institutions in philosophy and social sciences, Party school administrative colleges, research institutions under party and government departments.


2. Overseas urgently-needed talents:

This type of talent refers to those overseas scientific research personnel, technical backbone personnel, and senior management personnel working in the fields of scientific innovation, key development industries, or philosophy and social sciences in our city.


Here “related fields” include:

(1)Field of scientific innovation: Members of scientific research, engineering, and operation teams of national, provincial, or municipal major innovation platforms; Members of scientific and technical teams in higher education institutions, research institutes, medical institutions, public health institutions, or members of teams undertaking major vertical research projects at or above the municipal level, heads of key disciplines or specialties at or above the municipal level, and technical backbone personnel in medical and health care; Members of scientific research teams, technical backbone personnel, and senior management personnel in high-tech enterprises, "specialized and innovative" enterprises, and top manufacturers.


(2) Key industries: Members of research teams, technical backbone personnel, and senior management personnel in strategic emerging industries, future industries; Members of research teams, technical backbone personnel, and senior management personnel in the modern service industry.


(3)Philosophy and social sciences field: Personnel engaged in philosophy and social sciences research or teaching in higher education institutions, research institutions in philosophy and social sciences, Party school administrative colleges, or research institutions under Party and government departments.


IV. Tax conditions

Applicants must meet specific tax conditions to comply with the city's regulations. Firstly, they are required to pay taxes in accordance with the law, with their tax payments in Shenzhen surpassing the calculated tax amount. This calculation is detailed in the "Calculation Method for Personal Income Tax Subsidies."

Secondly, individuals must authorize and consent to the relevant authorities to access their tax information from the tax department for processing. 


· Calculation of individual income tax subsidy:

1. Subtract the calculated tax amount from the tax already paid during the tax year in Shenzhen to determine the individual's eligible tax subsidy.

This subsidy is exempt from personal income tax.

Here the "tax already paid" refers to the individual income tax paid in Shenzhen for income sources like salaries, wages, labor remuneration, royalties, franchise fees, operating income, and subsidy income from talent projects.

For those who need to settle their taxes annually, the actual tax paid after settlement in the following year is considered for subsidy calculation.

For those not requiring annual settlement, the actual tax paid after adjustments is considered.

Here the "calculated tax amount" derived by calculating the taxable income in Shenzhen using the Hong Kong tax laws at a standard rate of 15%.

If the individual's status changes to meet or no longer meetthe eligibility criteria during the tax year, subsidies are adjusted accordingly from the month following the change.


2. Subsidies are calculated separately for different income sources.


3. The maximum subsidy amount is capped at 5 million yuan (US$690,730).


V. Other conditions for applicants:

1. Applicants should comply with laws and regulations, research ethics and integrity. As of the date of acceptance by the accepting authority, the following circumstances are not allowed:

1) Within the past five years, there are records of major tax violations, making false claims, misappropriating or cheating financial funds, violations of research ethics, research integrity, or other dishonest behaviors, or direct or primary responsibility for the aforementioned behaviors of the applying institution.


2) Received criminal penalties for crimes committed within the country, or are under investigation for suspected crimes without a clear conclusion.


3) Listed as a dishonest person subject to enforcement, or having direct or primary responsibility for the applying institution being listed as a seriously dishonest entity. 


2.If applicants have received subsidies for high-level talent rewards, "Pengcheng Peacock Plan" special positions awards, or other talent rewards or subsidies in Shenzhen or various districts in 2023, the actual subsidy amount received in 2023 must be deducted from the total subsidy amount.


3. If the applicant also qualifies for individual income tax benefits for overseas high-end and urgently-needed talent in the Guangdong-Hong Kong-Macao Greater Bay Area and tax benefits for Hong Kong residents in Qianhai, Hetao areas, they can choose to enjoy one of these benefits and cannot simultaneously benefit from both.


·  Basic criteria for tax declaration entities:

Eligible entities: Businesses and institutions legally registered in Shenzhen.

Strict adherence to all laws and regulations is mandatory. Entities must not have records of major tax violations within the past five years, appear on the list of abnormal operations, or feature on Shenzhen's public credit platform as seriously untrustworthy entities.


· Application process:

1. Submission: 

Individuals or organizations applying for the subsidy need to register on http://tyrz.gd.gov.cn/, an identity authentication platform of Guangdong Province.

Individuals need to submit their application between May 15 and June 15 on the Guangdong Provincial Government Service Network https://www.gdzwfw.gov.cn/. Submit relevant supporting documents, make written commitments, and have their application verified by their employer if applicable.

Units should verify and endorse the applicant's information and materials before submitting the application by June 15.


2. Acceptance:

The receiving agency has five working days to decide whether to accept or reject the application.

Incomplete application materials should be rectified by the applicant within seven working days; otherwise, the application may be rejected.

Applications meeting the conditions for conditional acceptance will be processed accordingly.


3. Reviews

The receiving agency conducts a preliminary review and informs the applicant of the decision.If further examination is needed, the applicant will be notified.

A specialized department will then conduct a group review of the preliminary review results, verify the data, and compile a list of high-end and urgently-needed talents eligible for subsidies for approval.


4. Subsidy calculation:

Upon passing the group review, the receiving agency will inform applicantsthat they have five working days to confirm their annual tax data and submit it for subsidy calculation.

Applicants need to ensure that their identity information matches the information used for tax payment.

Any discrepancies in reported income or taxes paid or the estimated subsidy amount can be addressed by contacting the tax authorities or the human resources department.

Applicants will be informed if there are discrepancies between the calculated subsidy amount and the requested amount.


· Handling objections

If the applicant disagrees with the preliminary review opinion, he should submit an appeal within 7 days of being notified. Any objections raised after this period will not be received. The handling agency should re-examine the case within 15 days and inform the applicant of the review outcome.

If the applicant disagrees with the subsidy amount, they should submit a re-calculation request for the subsidy amount to the handling agency within 15 days upon being notified. The handling agency should complete the calculation within 60 days. If there is a difference after the calculation, it should be adjusted and communicated to the applicant. If the applicant does not raise further objections to the subsidy amount within 15 days of being notified, the handling agency will proceed with the subsidy disbursement according to the process.


· Subsidy disbursement

The handling agency will cross-reference the disbursement list and the calculated subsidy amount and directly transfer the funds to the applicant's designated financial social security card account or other personal bank account through the centralized payment system of the national treasury.

The ultimate authority for interpretation lies with the tax administration.


In a recent notification, guidelines for the declaration for the 2023 personal income tax financial subsidy of Shenzhen's overseas top talent and urgently-needed talent have been released.