How can you enjoy the 15% personal income tax rate in the Hainan Free Trade Port?
On August 26th 2020, the People’s Government of Hainan Province issued the “Interim Measures for the Management of the List of High-End Scarce Talents Enjoying Preferential Personal Income Tax Policies in the Hainan Free Trade Port”.
Below are some of the most frequently asked questions regarding the 15% personal income tax rate.
Scan the Qr Code to join the Hainan Free Trade Port Business Group on LinkedIn
Q: Who can enjoy the 15% personal income tax preferential policy in the Hainan Free Trade Port?
A: In the Hainan Free Trade Port, both domestic and foreign high-end talents and scarce talents who meet the criteria are eligible for the 15% tax preferential policy.
Q: What types of personal income are included in the above-mentioned preferential policy?
A: It includes comprehensive income, operating income, and talent subsidy income certified by Hainan Province, all derived from the Hainan Free Trade Port.
Comprehensive income encompasses four types of income: wages, labour remuneration, royalties, and franchise fees. Operating income refers to income obtained from personal and individual business operators engaged in production and business activities.
Q: How can high-end talents and scarce talents enjoy this policy?
A: They need to work in the Hainan Free Trade Port and have signed a labour contract or employment agreement with enterprises or units registered and substantially operating in the Hainan Free Trade Port for at least one year.
Additionally, within one tax year, they must have continuously paid social insurance for more than six months in the Hainan Free Trade Port (including the current December). This requirement does not apply to foreign talents who are unable to pay social insurance.
Q: How much annual income is needed to qualify for this preferential policy?
A: Based on calculations, the taxable income for comprehensive income is approximately 319,000 RMB, and for operating income, it’s around 210,000 RMB.
The taxable income for comprehensive income is calculated as the income for each tax year minus 60,000 RMB in expenses, as well as special deductions, special additional deductions, and other deductions determined by law.
The taxable income for operating income is calculated as the total income for each tax year minus costs, expenses, and losses.
Q: From when can eligible high-end talents and scarce talents enjoy this policy?
A: This policy has been in effect since January 1, 2020. Eligible high-end talents and scarce talents can enjoy the above-mentioned preferential policy when settling their annual individual income tax in Hainan Province. At that time, any excess tax burden over 15% will be refunded to the individual.
Q: What is the specific scope of high-end talents?
A: One of the following conditions needs to be met:
- Talent recognized by talent management departments at all levels in Hainan Province.
- Annual income in the Hainan Free Trade Port exceeding 300,000 RMB within one tax year.
Q: What is the specific scope of scarce talents?
A: It aligns with the Catalogue of Scarce Talents Demand in the Hainan Free Trade Port (attached below, subject to timely dynamic adjustments). It mainly includes the following five categories:
1. Key industry backbone talents and management personnel in the tourism industry, modern service industry, high-tech industry, tropical efficient agricultural seed industry, medical, education, sports, telecommunications, internet, culture, maintenance, finance, shipping, and other key fields.
2. Talents employed by government institutions and public institutions in Hainan Province, as well as talents employed by statutory agencies and social organizations.
3. Foreign talents meeting the relevant standards of the “Interim Measures for the Management of Work Permits for Foreigners in Hainan”.
4. Talents from Hong Kong, Macao, and Taiwan practicing in the Hainan Free Trade Port.
5. Key industry backbone talents and management personnel urgently needed in other non-restricted access industries in Hainan.
Q: What should be done in case of objections or disputes regarding eligibility for the policy?
A: If there are objections or disputes regarding talents enjoying tax preferential policies, they will be coordinated and resolved by the talent management departments at all levels in Hainan Province. If there are objections or disputes regarding whether the enterprises or units to which the talents belong are engaged in substantive operations in the Hainan Free Trade Port, they will be coordinated and resolved by the market supervision and administration departments in Hainan Province.
If you have any further questions regarding personal income tax, please call the Tax Service Hotline at 12366 for consultation.
Management Measures for the List of High-End Scarce Talents Enjoying Personal Income Tax Preferential Policies in the Hainan Free Trade Port.
Article 1: In accordance with the “Overall Plan for the Construction of the Hainan Free Trade Port” and the “Notice of the Ministry of Finance and the State Administration of Taxation on the Personal Income Tax Policies for High-End Scarce Talents in the Hainan Free Trade Port” (CaiShui [2020] No. 32), these measures are formulated to implement the personal income tax preferential policies for high-end talents and scarce talents in the Hainan Free Trade Port.
Article 2: Hainan Province implements list management for high-end talents and scarce talents enjoying preferential policies.
Article 3: High-end talents and scarce talents enjoying personal income tax preferential policies must work in the Hainan Free Trade Port and continuously pay basic pension insurance and other social insurance for more than six months within one tax year in the Hainan Free Trade Port (including the current December).
Additionally, they must provide labour relationship proof materials such as a labour contract or employment agreement signed with enterprises or units registered and substantially operating in the Hainan Free Trade Port for more than one year.
Foreign high-end talents and foreign scarce talents who are unable to pay social insurance must provide labour relationship proof materials such as a labour contract or employment agreement signed with enterprises or units registered and substantially operating in the Hainan Free Trade Port for more than one year.
Article 4: High-end talents enjoying personal income tax preferential policies must, in addition to meeting the provisions of Article 3, also meet one of the following conditions:
(1) They are recognized talents by talent management departments at all levels in Hainan Province.
(2) Their income in the Hainan Free Trade Port reaches over 300,000 RMB within one tax year (Hainan Province implements dynamic adjustments based on the economic and social development situation).
Article 5: Scarce talents enjoying personal income tax preferential policies must, in addition to meeting the provisions of Article 3, also fall within the scope of the Catalogue of Scarce Talents Demand in the Hainan Free Trade Port industry. The talent management department of Hainan Province is responsible for publishing the Catalogue of Scarce Talents Demand in the Hainan Free Trade Port industry and updating it in a timely manner.
Article 6: The talent management department of Hainan Province, together with relevant departments, shall regularly submit the list of high-end talents and scarce talents enjoying personal income tax preferential policies to the tax authorities of Hainan Province in accordance with the provisions of these measures. The tax authorities of Hainan Province may also, as needed, propose to temporarily identify high-end talents and scarce talents, and the talent management department of Hainan Province shall cooperate accordingly.
Article 7: Individuals determined to be high-end talents and scarce talents shall enjoy tax preferential policies in the current year. Those who no longer meet the criteria for high-end talents and scarce talents shall not enjoy tax preferential policies in the current year.
Article 8: Individuals who are legally listed as subjects of joint punishment for dishonesty shall not enjoy personal income tax preferential policies.
Article 9: Relying on the Hainan Social Management Informatization Platform, the talent management department of Hainan Province, social security, tax authorities, and other departments shall strengthen supervision during and after the event, conduct random inspections of the tax preferential situation of high-end talents and scarce talents, and conduct risk assessment and risk response work based on the inspection results.
Article 10: In case of objections or disputes regarding individuals enjoying tax preferential policies, the talent management departments at all levels in Hainan Province shall take the lead in coordinating and resolving them. In case of objections or disputes regarding whether the enterprises or units to which the talents belong are engaged in substantive operations in the Hainan Free Trade Port, the market supervision and administration departments of Hainan Province shall take the lead in coordinating and resolving them.
Article 11: The Talent Development Bureau of the Hainan Provincial Committee of the Communist Party of China, the Finance Department of Hainan Province, and the State Taxation Bureau of Hainan Province, in conjunction with this measure, shall formulate specific implementation rules.
Article 12: These measures shall be implemented from January 1, 2020, to December 31, 2024.
Catalogue of Scarce Talents Demand in the Hainan Free Trade Port (2020 Edition)
(1) Key Skills and Management Talents in the Tourism Industry
Talents in Tourism Strategic Research
Talents in Tourism Industry Research
Talents in Tourism Market Research
Talents in Tourism Service and Management
Talents in Tourism Resource Development and Utilization
Talents in Scenic Area Development and Management
Talents in Tourism Innovation and Creativity
Talents in Travel Agency Operations and Management
Talents in Hotel Management
Talents in Restaurant Management and Service
Talents in Exhibition Planning and Management
Talents in Tourism Information Management and Analysis
Certified Tour Guides
Senior Hotel Trainers and more
(2) Key Skills and Management Talents in the Modern Service Industry
Talents in Strategic Research
Business Negotiation Experts
International Trade Remedies Experts
Business Law Professionals
Translators
Food Engineers
Industrial Planning and Analysis Talents
Economic Analysis and Product Analysis Experts
Market Operation and Monitoring Talents
Foreign Notaries
Forensic Experts in Judicial Appraisal
Forensic Evidence Experts
Forensic Experts in Environmental Damage Assessment
International Commercial Arbitration Experts
Management Consulting Professionals
Professional Services for Investment Promotion
Marketing Management Talents, and more
(3) Key Skills and Management Talents in High-Tech Industries
R&D and Manufacturing Talents in High-End Manufacturing
R&D and Design Talents in Shipbuilding
R&D and Design Talents in Ocean Engineering
R&D and Design Talents in Automotive Engineering
Environmental Engineers
Petrochemical Engineers
Talents in Energy Conservation and Emission Reduction Projects
Professionals in Pollution Prevention and Control
Process Research Engineers
Laboratory Analysts
Senior Software Testing Engineers
Automation Equipment Engineers
Engineers in Digital Integrated Circuit Design
Talents in New Energy Development, Utilization, and Project Operations, and more
(4) Key Skills and Management Talents in the Agricultural Field
Talents in Crop Management
Talents in System Planning and Promotion
Talents in the Promotion and Application of Agricultural Achievements
Talents in Animal and Plant Genetics and Breeding
Talents in Germplasm Resource Development Research
Talents in Crop and Livestock Farming and Processing
Talents in Project Planning
Talents in Southward Breeding Construction and Operations, and more
(5) Key Skills and Management Talents in the Medical Field
Project Leaders in Research and Development
Pharmaceutical Research and Development Personnel
Pharmaceutical Quality Researchers
Pharmaceutical Synthesis Technicians
Animal Experiment Researchers
Organic Synthesis Researchers
Pharmacological Analysis Personnel
Pathological Diagnosis Personnel
Leaders in Clinical Research
Clinical Laboratory Technicians
Clinical Research Organization (CRO) Personnel
Drug Testing Personnel
Senior Technical Consultants in Medical Devices
Talents in Pharmaceutical Logistics Management
Strategic Procurement Managers
Talents in Pharmaceutical Retail Management
Practicing Physicians
Licensed Pharmacists
Rehabilitation Therapists, and more
(6) Key Skills and Management Talents in the Education Field
Members of Research Teams
Teachers
Researchers
Talents in Education Management
Talents in Project Management for Collaborative Education Programs, and more
(7) Key Skills and Management Talents for Employment and Entrepreneurship in the Sports Field
Sports Industry Management Talents
Talents in Project and Event Operation and Development
Talents in Sports Project Management and Promotion
Sports Coaches
Event Project Managers
Event Execution Specialists
Talent in Overseas Event Business Development, and more
(8) Key Skills and Management Talents in the Telecommunications Field
Information Technology Consultants
Electronic Engineers
Chip Design Engineers
Chip Design Architects
Low-voltage Intelligent Designers
Surface Treatment Engineers
Surface Mount Technology (SMT) Engineers
Printed Circuit Board (PCB Layout) Engineers
Vacuum Coating Engineers
Industrial Engineering (IE) Engineers
Process Engineering (PE) Engineers
New Product Introduction (NPI) Engineers
Radio Frequency (RF) Engineers
Telecommunications Designers
Technical Professionals in Telecommunications, and more
(9) Key Skills and Management Talents in the Internet Field
Management Talents
Product (Project) Managers
Software Engineers
Hardware Engineers
Big Data Analysis Engineers
Personnel in Big Data Processing and Applications
Spatial Information and Digital Technology Personnel
User Interface (UI) Designers
Web Front-end Development Engineers
Multimedia (Game) Development Engineers
Algorithm Engineers
System Architecture Engineers
Network Security Engineers
Mobile Development Engineers
Operations and Maintenance (O&M) Engineers
Information Security Engineers
Technical Professionals in Communications
Computer-Aided Design (CAD) R&D Engineers
Computer-Aided Engineering (CAE) R&D Engineers
Digital Media Technology Personnel
Personnel in Intelligent Science and Technology, and more
(10) Key Skills and Management Talents in the Cultural Field
Talents in Sports and Cultural Project Management
Talents in Literature and Data Development
Talents in Literature Collection and Compilation
Archaeological Professionals
Experts in Cultural Relic Identification
Talents in Cultural Relic Conservation
Talents in Cultural Relic Restoration
Exhibition and Education Talents
Talents in Cultural Relic Collection Management
Scriptwriters, Directors, Composers, Conductors, Performers
Talents in Stage Design
Stage Technicians
Talents in Literary, Painting, and Sculpture Creation
Talents in News Collection, Editing, and Broadcasting
Talents in Art Exhibition Curation
Talents in Animation Design and Creation
Advertising Designers
Graphic Designers
Talents in New Media Operations
Auctioneers, and more
(11) Key Skills and Management Talents in the Maintenance Field
Automotive Maintenance Talents
Ship Maintenance Talents
Aviation Maintenance Talents
Medical Equipment Maintenance Talents, and more
(12) Key Skills and Management Talents in the Financial Field
Financial Management Talents
Strategic Research Talents
Industry Research Talents
Market Research Talents
Technology Financial Talents
Fund Managers
Investment Banking Professionals
Credit Approval Professionals
Fixed Income, Currency, and Commodities (FICC) Talents
Exchange Investment Professionals
Industrial Investment Consultants
Actuaries in Insurance
Supply Chain Finance Professionals
Shipping Finance Professionals
Offshore Finance Professionals
Cross-border Financial Professionals
Cross-border International Trade Financing Professionals
Green Finance Professionals
Cultural Finance Professionals
Internet Finance Professionals
Entrepreneurial Finance Professionals
Wealth Management Professionals
Financial Product Development Talents
Financial Public Relations Professionals
Financial Data Analysts
Financial Legal Professionals
Financial Accounting Professionals
Financial Auditors
Financial Regulators
Guaranty Business Professionals
Factoring Business Professionals
Insurance Asset Management Professionals
Reinsurance Business Professionals
Underwriting and Claims Professionals
Financial Leasing Professionals
Credit Evaluation Professionals
Compliance and Anti-Money Laundering Professionals
Risk Management Professionals, and more
(13) Key Skills and Management Talents in the Shipping Industry
Port Civil Project Managers
Talents in Port and Waterway Planning, Construction, and Operations
Shipping Management Talents
Maritime Service Personnel
Foreign Port Operations Officers
Foreign Legal Affairs Specialists
Port Site Instructors (Dispatchers, Control Operators, Planners)
Foreign Affairs Representatives
Registered Ship Inspectors
Crew Qualification Personnel (including crew and fishery crew)
Pilots
Aviation Personnel Qualification Personnel (including aircrew and ground personnel, including foreign pilots, navigators, flight engineers, flight communicators, aviation safety personnel, civil aviation telecommunications personnel, navigation information personnel, meteorological personnel, flight attendants, etc.)
Propulsion Development Talents
Satellite Navigation Development Talents
Aerodynamic Design Engineers
Modeling and Computing Engineers
Aerospace Information Technology Personnel, and more
(14) Logistics, Construction, Marine Oil & Gas, Statistics, etc.
Logistics Enterprise Management Talents, Logistics Industry Research Talents, Logistics Project Development Talents, Logistics Park Distribution Center Planning and Design Talents, Logistics Planning Engineers, Supply Chain Specialists, International Procurement Managers, International Freight Forwarding Managers, Customs Clearance Specialists;
Construction Planning Project Management Talents, Building Design and Research Talents, Urban and Rural Planning and Research Talents, Landscape Architecture Design and Research Talents;
Marine Oil and Gas Engineering Tracking Management Talents, Marine Oil and Gas Resource Evaluation Talents, Marine Oil and Gas Exploration Talents, Marine Oil and Gas Geological Evaluation Talents;
Research Statistics Professionals, Analysis Statistics Professionals, Legal Statistics Professionals, and more.
(15) Others
Talents employed in government agencies, public institutions, and statutory organizations in Hainan Province. Other foreign personnel (Category C) who meet the relevant standards of the “Interim Measures for the Management and Service of Foreigners Working in Hainan”. Talents from Hong Kong, Macao, and Taiwan practicing in Hainan Free Trade Port. Key Skills and Management Talents urgently needed in other non-restricted industries in Hainan.
Related article: Compilation of important policies for Hainan Free Trade Port (February 2024)
