China, People's Republic of

Corporate - Significant developments

Last reviewed - 29 June 2022

After China released the Plan for the Development of the Guangdong-Macao Intensive Cooperation Zone in Hengqin (Hengqin) (the Plan) in September 2021, several tax incentives proposed in the Plan have been implemented in Hengqin during the first half year of 2022, including:

  • Enterprises registered in Hengqin with operational substance in Hengqin are entitled to a reduced CIT rate of 15%, provided that enterprises are engaged in projects that fall within the Hengqin Catalogue for CIT Preferential Treatments.
  • Enterprises registered in Hengqin engaged in tourism, modern service, and high-tech industries are exempted from CIT on the income generated by new overseas direct investment.
  • Capital expenditures that meet certain requirements are eligible for deduction in one lump sum or accelerated depreciation or amortisation methods.
  • For domestic or overseas high-end talents and talents in short supply working in Hengqin, their portion of IIT which exceeds an effective tax rate of 15% is exempted.
  • For Macao residents working in Hengqin, their portion of IIT exceeding the tax burden calculated under Macao’s individual tax regime is exempted.