Government urged to offer tax concession to frequently travelling GBA workers

EY believes it will facilitate talent exchange amongst Greater Bay Area cities.

Accounting and professional services firm Ernst & Young is urging the government to provide individual income tax exemption to residents who frequently travel in Greater Bay Area cities to work in an effort to facilitate higher levels of talent exchange.

Under the Mainland and Hong Kong’s Comprehensive Double Taxation Agreements (CDTA), Hong Kong residents who stay in China for more than 183 days in any relevant 12-month period are required to pay individual income tax in the Mainland. 

However, this poses challenges for mobile businesses as both employers and employees may need additional time and effort to apply double taxation relief in the form of tax credits.

“To facilitate talent exchange among cities in the GBA, we suggest that Hong Kong residents employed by a Hong Kong resident employer that need to travel frequently in the GBA would be exempt from individual income tax in mainland China, regardless of their number of days of presence in mainland China,” said EY People Advisory Services Partner Robin Choi. 

The proposal includes a similar exemption from Hong Kong’s salary tax for Mainland residents who work in Hong Kong. 

Choi also urges the government to rush its negotiation of a CDTA with Macau and seek inclusion of tax concession for Hong Kong residents who travel frequently to Macau for work.