New preferential IIT policy to lure more talents to Hainan FTP

By Li Xiang / HICN / Updated: 21:16,21-September-2022

As part of preparations for island-wide independent customs operations by 2025, southern China’s Hainan Province lessened the threshold requirements for talents to enjoy the preferential IIT (Individual Income Tax) policy on September 15, in hopes of bringing in more talents for the development of the free trade island.

According to the updated policy, those working in Hainan are eligible to enjoy the preferential IIT policy, if they:

A) have been living for at least 183 days in Hainan within a tax year AND

B) have been listed in the latest catalog of personnel with high-level and sought-after expertise by the Hainan Human Resources and Social Security Department, OR have made an income of at least 300,000 yuan (about $42,585) in Hainan within a tax year.

One of the major preferential tax policies stated in the master plan for the Development of the Hainan Free Trade Port is that, personnel with high-level and sought-after expertise working in Hainan are entitled to a reduced maximum IIT rate of 15% before 2025. (Photo: hainanexpo.org.cn)

Prior to adjustment, the policy stated that personnel with high-level and sought-after expertise can enjoy the benefit only once they have participated in basic medical insurance in Hainan for at least six months. This condition has now been removed and instead replaced with the aforementioned condition A. Meanwhile, alternative requirements were formulated for those working in aviation, shipping, offshore oil & gas exploration and other industries who cannot meet condition A because of their lack of fixed workplace, to ensure that they have a higher chance of enjoying the policy.

September 15 also saw the latest catalog of personnel with high-level and sought-after expertise released by the Hainan Human Resources and Social Security Department, which includes personnel with intellectual, technical and management skills working in tourism, modern services, new & high tech, agriculture, healthcare, finance and other major industries on the tropical island. Notably, the catalog also lists qualified international personnel holding Category C work permits per the work permit policy for foreigners issued by the Hainan Provincial People’s Government.

The new policy will take effect from January 1, 2023. This means that in 2024, when the IIT declaration for 2023 is filed, eligible personnel will be able to enjoy the updated preferential IIT policy.

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