Our collection of resources based on what we have learned on the ground
In 2019, China introduced the preferential policy on individual income tax (IIT) subsidy for overseas professionals and talents working in nine cities in Guangdong. The second round of IIT subsidy applications to access these subsidies started from July 2021.
Dezan Shira & Associates’ Senior Manager of Corporate Accounting Services in Shenzhen, Amber Liu, and her team in the GBA are providing advisory services regarding this policy and assisting talents and their employers in material preparation, submitting application, and coordination with local government departments. We sat down with her and asked some typical questions received from our subscribers, in a bid to help future applicants succeed in obtaining the IIT subsidies.
I started working in Shenzhen in July 2020, can I apply for the Shenzhen IIT subsidy for 2020?
There are a few requirements to meet to be qualified for the application:
- The paid IIT in Shenzhen (SZ) is over 15% of your taxable income;
- You have worked for your SZ employer over 90 days in 2020;
- You have type A or B work permit issued by SZ; or
- You meet other qualifications for high-end and urgently needed talent.
If you don't qualify in Shenzhen, but you have worked in other GBA cities before your SZ employment, you could check if you meet the standards in those cities.
I missed my IIT subsidy application for 2019 last year. Can I submit it this year?
Yes, you could submit your application again this year within the same submission period set by the local government. However, the policy for 2019 shall apply.
Please note that this is the only chance to make up for a missed application for 2019.
Will the subsidy be taxed after granted?
The subsidy is exempt from IIT. This means that if 1000 RMB of subsidy is granted, you will receive 1000 RMB - no tax will be deducted from it.
I do not have a Chinese bank card. Could the subsidy be released to our company account first and then get transferred to my overseas bank account?
No. The target group of these subsidy policies is not the companies, but the individuals. To prevent the company from misappropriating the money, the subsidy can only be distributed to a personal bank account.
Can I use my overseas bank account to receive the GBA IIT subsidy from the government? Or do I need to open a Chinese bank account?
Only a Chinese bank account can receive the subsidy from the Chinese government. Please also make sure that the beneficiary’s name on the bank account is the same as the taxpayer’s name registered with the tax bureau.
I work for a company in the GBA, but my salary and tax are handled by another third-party agency. Will this affect my application and how?
This is a quite common question, as many companies refer to a third-party agency for handling salary and tax issues. There is no specific requirement on this in the policy. Based on our experience, we suggest you have the service agreement between your employer company and the agency prepared, and let the agency chop all materials you need to submit.
If you are looking for professional guidance on the IIT subsidy application in the GBA, please do not hesitate to contact us.
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