Chen Xiaohui, chief reporter of Shenzhen Business Daily Reading and Innovation Client
Recently, Qianhai ushered in two blockbuster tax policies.
According to official information on April 18, the Ministry of Finance and the State Administration of Taxation have recently officially issued and implemented the "Notice on the Preferential Individual Income Tax Policies for the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone" (CS [2024] No. 12) and the "Notice on the Preferential Enterprise Income Tax Policies for the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone" (CS [2024] No. 13), which clearly exempts Hong Kong residents working in Qianhai from the part of their individual income tax burden that exceeds the Hong Kong tax burden; The preferential corporate income tax policy has been extended to the entire Qianhai Cooperation Zone.
What does the official introduction of the two favorable policies mean for Qianhai and Bao'an, and what signals have been released?
Qianhai policy "expansion"
Unleash a huge siphon effect
In fact, the preferential tax policies in Qianhai have long been stipulated.
In December 2023, the State Council approved the Overall Development Plan for the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, which clearly states that fiscal and tax policy support will be strengthened, and the enterprise income tax will be levied at a reduced rate of 15% for eligible enterprises in Qianhai according to regulations, and the preferential catalogue of enterprise income tax will be adjusted in a timely manner according to the development of Qianhai and the need to serve Hong Kong to consolidate and enhance its competitive advantage. For overseas high-end talents and talents in short supply working in Qianhai, the part of their individual income tax burden exceeding 15% will be subsidized, and the subsidy will be exempted from individual income tax. For Hong Kong residents working in Qianhai, the part of their individual income tax burden that exceeds Hong Kong's tax burden will be exempted.
The official introduction of these two major policies indicates that the preferential tax policies of the Qianhai Cooperation Zone are gradually being implemented.
The biggest highlight of the new tax policy is that it has also been "expanded" on the basis of the original tax incentives, extending the 15% preferential corporate income tax policy in Qianhai to the whole Qianhai Cooperation Zone, which means that enterprises in the entire "Greater Qianhai" area can enjoy this real money preferential treatment.
What does the implementation of the blockbuster policy mean for Qianhai? The most direct impact is, of course, to reduce the operating costs of enterprises.
Tax policy is directly related to the operating costs and profitability of enterprises. It is important to know that at present, the basic tax rate uniformly applicable to Chinese enterprises is 25%, and the implementation of the "reduced tax rate of 15%" can allow enterprises to pay less tax, which greatly saves the operating costs of enterprises.
In the long run, this will greatly enhance the siphon effect of Qianhai. According to the policy, Hong Kong residents working in Qianhai will be exempted from the part of their individual income tax burden that exceeds the Hong Kong tax burden. This will eliminate the difference in tax burden caused by the difference in tax systems between the two places, attract more Hong Kong talents to come to Qianhai for innovation and entrepreneurship, and also attract more global investors and talents to enter the "Greater Qianhai", unleashing a huge siphon effect, gathering global talents, capital and innovation resources, and more fully releasing the "scale effect" and "multiplier effect" of the expanded area, so as to achieve a new round of leapfrog development.
"1/5 Bao'an" reception
Or become the biggest winner
Qianhai benefited, and the biggest winner was Bao'an.
"2/3 of Qianhai is in Bao'an, and 1/5 of Bao'an is Qianhai." In September 2021, the Plan for Comprehensively Deepening the Reform and Opening-up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone was launched. The total area of Qianhai has expanded from 14.92 square kilometers to 120.56 square kilometers, including 82.75 square kilometers in Bao'an.
This means that the vast majority of enterprises and individuals benefited by the tax policy, and "1/5 of Baoan" also benefited. This will bring significant benefits to Bao'an's industrial development.
The fundamental purpose of the implementation of preferential tax policies is industrial development. From the perspective of Qianhai's industrial structure, Qianhai is mainly benefited by the modern service industry. According to the data, Qianhai's service industry will account for 71% of GDP in 2023, and the operating income of service enterprises above designated size will increase by 31.7% year-on-year. At present, the added value of Qianhai's modern service industry accounts for 52.5%, which is an important driving force for economic growth.
The expansion of the policy to "Greater Qianhai" shows that modern service enterprises in the entire "Greater Qianhai" area will benefit, and the preferential tax policy is also conducive to attracting Hong Kong talents to develop in Qianhai, and Hong Kong's comparative advantage is the modern service industry. Therefore, no matter from which dimension, the preferential tax policy will greatly promote the development of the modern service industry in the whole Qianhai, which means that the modern service industry in Bao'an will also take off for 2/3 of the area of Qianhai.
The modern service industry in Bao'an is very important to the development of Bao'an.
In February this year, Bao'an took the lead in releasing a three-year action plan in the city, accurately deploying 10 major producer service industry fields, planning 8 major producer service industry clusters, and making every effort to build a national leading and world-class producer service industry agglomeration highland, innovation pioneer and demonstration benchmark.
Looking at the world's two largest manufacturing powers, Germany and Japan, their service sector accounts for more than 70% of employment. And the more advanced the manufacturing industry and strategic emerging industries, the more it needs to promote and work together with the high-end modern service industry.
It is foreseeable that the adjustment of the two tax policies in Qianhai is not only for individuals and enterprises to benefit, but also related to the industrial development of Greater Qianhai and Bao'an, which will help promote the integrated development of advanced manufacturing and modern service industries, and strive to build Qianhai "high-quality development highland of modern service industry" and "world-class advanced manufacturing highland" in Bao'an.
The world's Qianhai,
Soaring Bao'an!
Looking at the world's developed economies, many have adopted preferential tax policies to attract talents and investment. According to the World Bank's Doing Business report, paying taxes is one of the important indicators.
The two blockbuster policies launched by Qianhai this time mark that Qianhai is further in line with international standards in terms of tax environment, and will help attract global capital and innovation resources to gather in Qianhai, and the formation of a world-class Qianhai is accelerating.
As a major national strategic platform and a "special zone within a special zone", Qianhai has made every effort to promote the convergence of systems and rules and promote the high-quality development of the industry in accordance with the overall positioning of "relying on Hong Kong, serving the mainland and facing the world" since the release of the Plan for Comprehensively Deepening the Reform and Opening-up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone.
Not only in terms of preferential tax policies, in November last year, the country's first regional investor protection legislation, the "Regulations on the Protection of Investors in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of the Shenzhen Special Economic Zone", was officially implemented. The law aligns with the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the World Bank's Business-Friendly Environment Assessment System (BEE), and is in line with global investment, economic and trade rules.
This also reflects Qianhai's focus on the global coordinate system and its increasing emphasis on aligning with international rules and participating in international competition.
Bao'an, which has 2/3 of the area of Qianhai, is accelerating towards a "world-class advanced manufacturing highland" under the empowerment of the modern service industry of "Greater Qianhai".
It is worth mentioning that the opening of the Shenzhen-Zhongshan Channel is in sight. In the future, Shenzhen-Zhongshan cross-city bus plans to open 2 lines, of which the "Zhongshan Expo Center - Qianhaiwan Metro Station" line will be opened simultaneously with the Shenzhen-Zhongshan Channel, the line Shenzhen has 4 stations, namely: Shenzhen West Railway Station (the first and last station), Qianhaiwan Metro Station, Xixiang Bus Station, Shenzhen Bao'an International Airport (the first and last station). It can be seen from the site that Bao'an is the east bank foothold of this super major connection project on the east and west banks of the Pearl River estuary, Zhongshan Cuiheng New Area and Shenzhen Bao'an axis are connected, and Dongguan Binhaiwan New Area and Bao'an are seamlessly connected, which will jointly form a strong power source for the future "Golden Inner Bay".
A world-class Qianhai, a world-class Bao'an, and a world-class Greater Bay Area are accelerating!
Editor: Huang Xiaomin
Review: Qiao Huiqing
Producer: Wang Fang