On 30 June 2020, the Ministry of Finance together with the State Taxation Administration released the <Circular about Preferential Enterprise Income Tax Policy for Hainan Free Trade Port>, and the <Circular about Individual Income Tax Policy for High-end and Urgently Needed Talents at Hainan Free Trade Port>. The two circulars will be implemented from January 1, 2020 until December 31, 2024. ( You may check our previous post: Breaking news! Master Plan Unveiled for the Construction of Hainan’s New Free Trade Port for more news about the Hainan Free Trade Port. )
According to the circulars, for high-end and urgently needed talents working at the Hainan Free Trade Port, the individual income tax rate is capped at 15%, meaning the portion of the actual tax burden of individual income tax exceeding 15% shall be exempted.
The income referred to in the above-mentioned preferential policies includes the comprehensive income derived from Hainan’s Free Trade Port (including wages and salaries, labor remuneration, copyright remuneration, royalties), operating income and the subsidized income of talents recognized by Hainan Province.
For companies that are registered at the Hainan Free Trade Port and operate the business substantially from this location, the corporation tax is reduced to 15%. Income on additional overseas direct investments by companies in tourism, modern services, or the high-tech sector will be exempted from corporation tax altogether.
Useful Link:
Ministry of Finance of the People’s Republic of China
