Policy content

According to the latest joint notice issued by the Ministry of Finance and the State Taxation Administration, the individual-income-tax (IIT) preferential policy for high-end and urgently-needed talent in the Hainan Free Trade Port (FTP) will remain in force through December 31, 2027. Eligible talent working in the FTP will continue to be exempt from the portion of their actual IIT burden exceeding 15 percent.

Covered income

Income covered by this policy includes:

(a) Comprehensive income earned in the Hainan FTP (salaries and wages, remuneration for services, author’s remuneration, and royalties);

(b) Operating income earned in the Hainan FTP;

(c) Talent subsidy income recognized by Hainan province.

Eligibility requirements

Eligible individuals can claim the 15 percent IIT cap when completing their annual IIT settlement in Hainan, provided they meet one of the following routes:

Route 1 – Standard Residence Eligibility

(a) The taxpayer has resided in the Hainan FTP for at least 183 days within a single tax year.

(b) The taxpayer is recognized as talent by relevant talent management authorities at all levels in Hainan province, or has an annual income within the FTP of 300,000 yuan ($42,105.6) or above during the tax year (the income threshold may be adjusted in line with the province's economic and social development).

Route 2 – Short-Stay Exception for Certain Industries

This route applies to taxpayers in industries with unique operational requirements, such as aviation, shipping, and offshore oil and gas exploration, who are unable to meet the 183-day residence requirement within a tax year, provided that:

(a) They meet the talent recognition or income requirements outlined in Route 1 (b).

(b) They have made continuous contributions to the basic employee pension insurance within the FTP for at least 6 months during the tax year, including December of that year, excluding those exempt under China’s bilateral social security agreements.

(c) They have signed an employment contract, appointment agreement, or can provide equivalent documentation demonstrating an employment relationship of no less than 1 year with an enterprise or organization that is registered and substantively operating within the FTP.

Eligible individuals should submit an application with supporting documents and an explanation to the tax authorities within the prescribed timeframe. Upon review and confirmation by the Human Resources and Social Security Department of Hainan province, the preferential policies may then be applied.