Professionals Working in Qianhai to Get Lower Tax Rates

Professionals working in Qianhai to get lower tax ratesA preferential tax system will allow Hong Kong and other overseas professionals who work in the Qianhai special development zone in Shenzhen to pay their income tax at Hong Kong rates.

A zone administration spokesman said that specialists  working in the Qianhai zone need only pay personal income taxes at rates levied by the Hong Kong government. This tax system was approved three months prior by lawmakers, in hopes of attracting more professionals to come and work in the 15 kilometer coastal area in Nanshan district. Currently Qianhai is designed to become a modern service industry cooperation zone between Shenzhen and Hong Kong.

The rationale for this taxation system is that it would not be fair to Hong Kong residents working in Qianhai to be taxed at the mainland level. The spokesperson also said that more tax breaks will be implemented to attract more Hong Kong investors int the zone. A plan to reduce sales tax from 5 percent down to 3 percent is also being discussed.

Currently personal income tax rates on the mainland are at 45 percent, while the maximum rate in Hong Kong is at 15 percent which is the lowest in the world. Overseas companies will also get a 15 percent set rate as their corporate income tax in Qianhai compared to the 25 percent rate in the mainland.

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