Notice of the Ministry of Finance and the State Taxation Administration on the Individual Income Tax Policy for High-End and In-Demand Talents in the Hainan Free Trade Port

(Cai Shui [2020] No. 32)

Issuing Authorities: Ministry of Finance, State Taxation Administration
Date of Issuance: June 23, 2020

To: Hainan Provincial Department of Finance, Hainan Provincial Tax Service of the State Taxation Administration

In order to support the development of the Hainan Free Trade Port, the following notice on preferential individual income tax policies is hereby issued:

Article I

For high-end talents and in-demand talents working in the Hainan Free Trade Port, the portion of their actual individual income tax burden exceeding 15 percent shall be exempted.

(Explanation: This means that if an individual’s calculated PIT liability under national law is greater than 15 percent of their taxable income, the amount above that level is waived, resulting in an effective tax burden capped at 15 percent.)

Article II

The income eligible for the above preferential policy includes:

• Comprehensive income derived from sources within the Hainan Free Trade Port — namely wages and salaries, remuneration for labor services, author’s remuneration, and royalties;

• Business income derived from production or business operations within the Hainan Free Trade Port; and

• Talent subsidy income recognized by Hainan Province.

Article III

Taxpayers shall enjoy the above preferential policy when conducting the annual individual income tax reconciliation and settlement within Hainan Province.

Article IV

High-end talents and in-demand talents enjoying the above preferential policy shall be subject to list-based administration.
Specific administrative measures shall be formulated jointly by the People’s Government of Hainan Province, the Ministry of Finance, and the State Taxation Administration.

Article V

This Notice shall be implemented from January 1, 2020, to December 31, 2024.

Ministry of Finance
State Taxation Administration
June 23, 2020