By China Jobs Daily
This article is an interpretation of the recent policy titled: “Shenzhen Municipal Guidelines for Personal Income Tax Fiscal Subsidy Reporting of Tax Year 2019 for Overseas High-caliber Personnel and Urgently-needed Personnel”
Shenzhen has formulated the “Shenzhen Municipal Guidelines for Personal Income Tax Fiscal Subsidy Reporting of Tax Year 2019 for Overseas High-caliber Personnel and Urgently-needed Personnel” (hereinafter, “Reporting Guidelines”) in order to implement the preferential personal income tax policy in Guangdong-Hong Kong-Macau Greater Bay area. The interpretation of the policy is hereby described as follows:
I. Who is considered overseas high-caliber personnel and urgently-needed personnel?
Overseas high-caliber personnel and urgently-needed personnel refers to permanent residents in Hong Kong or Macau, Hong Kong residents who are accepted into the Hong Kong entry program (elites, professionals and entrepreneurs), mainland residents who are domiciled in Hong Kong or Macau (whose mainland household registrations have been deregistered), residents in Taiwan, foreign nationals whose tax-paid income reaches the specified limits, returned overseas students, and overseas Chinese who have acquired an overseas permanent residence legally and who work for employers in Shenzhen and pay taxes according to the law in Shenzhen, comply with laws and regulations, demonstrate ethics and integrity in scientific research and meet one of the eligibility criteria listed in Articles d1-d8 of the Reporting Guidelines.
II. Can business entities established by Shenzhen-based business entities outside Shenzhen report?
The reporting entities must be companies or institutions registered in Shenzhen with the appropriate supervising entities, civil affairs divisions, and establishment management departments of the local government.
III. What are the “prioritized industries and fields in Shenzhen” within the scope of reporting?
The prioritized industries and prioritized fields are determined according to Shenzhen’s economic and industrial development plans and specifically refer to business entities that meet one of the conditions listed in Articles a1-a8 of the Reporting Guidelines.
IV. How to calculate the amount of subsidy for personal income tax?
Within the tax year of 2019 (i.e., from January 1, 2019 to December 31, 2019), the tax amount paid by the reporting individual minus the calculated tax amount is the amount of subsidy for personal income tax that the reporting individual can apply for. Of them, the tax amount paid refers to the amount of personal income tax paid according to the “Personal Income Tax Law of the People’s Republic of China” on “wage and salary income”, “income from service remuneration”, “income from author’s remuneration”, “income from royalties”, “business income”, and “subsidy income received from admission into the talent program or talent project”（including the taxes refunded or retroactively paid that are involved when handling the final settlement of 2019 in 2020, when calculated）. The calculated tax amount for 2019 is calculated according to the standard tax rate method, i.e., calculated tax amount =taxable income amount of the declarant x 15%.
No subsidy will be given, nor any application is required to be submitted in the reporting system if the calculated tax amount is no less than the tax amount paid.
V. What conditions need to be met in order to be qualified as “intermediate and higher management personnel”, “key technicians and technologists”, “outstanding youth personnel”, and “intermediate or higher managers” within the scope of talented personnel?
The “key technicians and technologists”, “outstanding youth personnel”, and “intermediate or higher managers” will all be determined by the employers themselves based on the facts compiled by the applying entity.
VI. How do I apply for and receive the subsidy?
The process involves filing by the employer, a personal application, a review by the employer, the submitting of the appropriate materials at the service department, a qualification review, a subsidy calculation, a subsidy issuance, and dispute resolution in chronological order.
The acceptance of the application for subsidy, review, and issuance of subsidy will be the responsibility of the departments designated by the people’s government in each district, Dapeng New Area Management Committee, Qianhai Shenzhen-Hong Kong Modern Service Sector Cooperation Zone and Shenzhen-Shantou Cooperation Zone. This business will be handled online from end to end, without the need to submit paper-based materials at the service counter.
VII. How to supervise those individuals who falsely report?
The subsidy business adopts reporting under a system with a commitment to integrity, whereby the reporting individuals and reporting entities are responsible for the authenticity of information filed and materials submitted. According to the “Regulations of Shenzhen Special Economic Zone on Human Resources”, any reporting individual who has been found to have committed any fraudulent act will be disqualified as applicant and may not apply again for personal income tax subsidy within five years of disqualification; any reporting entity that has been found to have committed any fraudulent act will be disqualified from applying on their talent’s behalf and may not apply for a personal income tax subsidy within five years of disqualification; where the personal income tax subsidy has been received, the department issuing the subsidy will recover the subsidy and accrued interest (to be calculated at the demand deposit interest rate published by the People’s Bank of China from the date of subsidy issuance to the date immediately preceding the date of return of subsidy, subject to period-to-period calculation in case of any adjustments to the interest rate); in case any crime has been allegedly committed, the case will be handed over to the judicial authorities for resolution according to law.