GUANGZHOU, China, Nov. 30, 2022 /PRNewswire/ -- Recently, Guangzhou released the Measures of Preferential Individual Income Tax Policy in Nansha District of Guangzhou Municipality. The document clarifies the implementation details. Under these measures, for Hong Kong and Macao residents working in Nansha, the IIT burden exceeding that in the two special administrative regions (SARs) will be exempted.
This tax policy was launched in accordance with the tax system of the Chinese mainland to promote the alignment of tax rules between Guangzhou and the two SARs. It will help create a favorable business and living environment in Nansha where the IIT policies align with those of Hong Kong and Macao and facilitate Hong Kong and Macao residents in the establishment of their own businesses or simply gaining employment in Nansha. The associated benefits generated in the development of the Greater Bay Area will be shared by more Hong Kong and Macao residents, according to Nansha District People's Government of Guangzhou City.
Nansha sits at the geometric center of the Guangdong-Hong Kong-Macao Greater Bay Area and serves as a vital hub for the area's interconnection. On June 14 of this year, China's State Council issued an overall plan to promote comprehensive cooperation among Guangdong, Hong Kong and Macao by further deepening opening-up in Nansha, thus giving Nansha a new positional objective and a major mission.
Zhaoke Ophthalmology, a biomedical company founded in Nansha, had only one Hong Kong executive based in Nansha before the Plan of Guangzhou Nansha was implemented. Given that Hong Kong residents who work in Nansha can now enjoy tax rebates in line with the Hong Kong tax system, more overseas executives are forecast to be based in Nansha. "As our Hong Kong team boasts advantages in the R&D and introduction of biomedical technology, this tax policy will help attract more talent with an international vision for our company," said its board chairman, Dr. Li Xiaoyi.
This is not the first tax preferential policy after the release of the Plan of Guangzhou Nansha. Recently, Guangdong Province officials forwarded the Notice of the Ministry of Finance and the State Taxation Administration on Preferential Policies on Corporate Income Tax in Guangzhou Nansha for the benefit of key businesses and industries, and they advanced their opinions on its implementation. This marked the official implementation of the corporate income tax (CIT) incentive in Nansha.
Targeting key businesses and industries, this tax preferential policy features two highlights. First, in Nansha's launch areas, qualified businesses in the encouraged industries may enjoy a reduced corporate income tax rate of 15%. Second, starting from January 1, 2022, high-tech companies or small- and medium-sized tech firms in Nansha are allowed to extend their carry-over of losses for up to 13 years. Such losses refer to those incurred within eight years before they become qualified for this policy.
As a Hong Kong-invested company that has been in Nansha for over ten years, Zhaoke Ophthalmology is committed to the R&D and manufacture of biomedical products. Compared with only 30-odd employees upon its establishment in 2018, the company now has a strong workforce of more than 300 people, over half of whom are R&D staff.
Regarding this tax incentive, Dr. Li Xiaoyi said that under the guidance of these new policies, Chinese businesses will gradually reduce their reliance on foreign technologies and focus more on independent technology R&D.
These two tax policies were issued successively. So far, all tax preferences under the Master Plan of Guangzhou Nansha have rapidly been refined and implemented.
Nansha's tax policies will continue to enhance the willingness of market entities to participate in the district's development and boost the confidence of Hong Kong and Macao entrepreneurs to develop in Nansha, and encourage numerous industries and businesses to compete in the global arena and to build Nansha into a portal for high-level opening-up .
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