2. Are there any tax incentives for Hong Kong residents working in the Greater Bay Area (“GBA”)?

2. Are there any tax incentives for Hong Kong residents working in the Greater Bay Area (“GBA”)?

While there are no such tax incentives in Hong Kong, the Mainland China tax authorities do provide certain tax incentives to eligible individuals. For instance, on 6 November 2019, the Central Government promulgated 16 policy measures for the benefits of Hong Kong people’s development in the Greater Bay Area. Amongst other measures, the tax incentives in the Greater Bay Area for Hong Kong residents are highlighted as follows: 

• Starting from 1 January 2019, an individual who has no domicile and has resided in the Mainland for (1) 183 days or more in a year and (2) stayed less than 182 days in any one year or left Mainland for more than 30 days in one occasion, in the preceding 6 consecutive years, shall, upon filing with the relevant tax authorities, be exempted from Individual Income Tax with respect of his/her income derived from sources outside the Mainland and paid by institutions or individuals outside the Mainland. As regards the method for calculating "183 days" for paying Individual Income Tax in Mainland, any stay of less than 24 hours on the Mainland will not count as a day of presence;

• Starting from 1 January 2019 and on trial for one year, pursuant to the "Notice on Implementing the Individual Income Tax Preferential Policies in the Guangdong-Hong Kong-Macao Greater Bay Area”, municipal governments shall provide tax relief to non-Mainland China high-end talents and talents in short supply, provided that the Hong Kong permanent residents meet the conditions stipulated in the Notice. The municipal governments will grant tax relief in the form of subsidies to the residents for Individual Income Tax paid exceeding 15% of the taxable income. 

Individual Income Tax Preferential Policies in Guangdong, Hong Kong and Macao Greater Bay Area

On 2 June 2023, in furtherance of the tax relief measure to high-end talents pursuant to the "Notice on Implementing the Individual Income Tax Preferential Policies in the Guangdong-Hong Kong-Macao Greater Bay Area” in 2019, the Guangdong government authorities issued the “Notice in relation to Further Implementation of Individual Income Tax Preferential Policies in Guangdong, Hong Kong and Macao Greater Bay Area” (“Further Notice”), announcing that, starting from 21 June 2023, overseas high-end and urgently needed talents working in the Guangdong Hong Kong Macao Greater Bay Area will enjoy a subsidy by the government of the nine cities of the Pearl River Delta in respect of his/her portion of the Individual Income Tax paid in the nine cities of the Pearl River Delta that exceeds 15% of the tax amount calculated based on the taxable income, subject to a cap of RMB 5 million for each taxpayer in each tax year. 

The Individual Income Tax under the Further Notice refers to the amount paid on the following gains/income:

• Incomes from wages and salaries;
• Incomes from remuneration for labor services;
• Incomes from authors' remuneration;
• Incomes from royalties;
• Incomes from business operations; and
• Subsidies received from talent engineering and talent projects.

In order to apply for and receive the subsidies, the relevant Hong Kong taxpayer must fulfill the following basic criteria: 

• Hong Kong permanent residents, Hong Kong residents under the Admission Scheme (talents, professionals and entrepreneurs) etc.;
• Persons working and paying taxes in the 9 cities within the Pearl River Delta;
• Persons abiding with the law, research ethics and integrity; and
• Talents who belong to the fields of scientific and technological innovation, key development industries, philosophy and social sciences, and meet the high-end talent and talent in short supply requirements as set out by each of the municipal governments.

Taxpayers should consult the local tax authorities for detailed requirements and procedures of the Individual Income Tax Preferential application. The application may be submitted by the applicant or his/her authorised employer. 

This above is not an exhaustive list of the relevant tax incentives for Hong Kong residents working in the GBA, but only some highlights as of the last reviewed date of this page for your information. You should therefore be mindful that these tax incentives provided by the Mainland China tax authorities may change and should consult the relevant local tax authorities in the Mainland China if you have any queries.