Every Major Hainan FTP Tax Relief Now Expires on the Same Day
The corporate income tax reduction, the talent income tax cap and the capital expenditure relief were each extended separately in 2025 — and each now runs to 31 December 2027. That common end date is a planning fact, not a footnote.
HainanInc Tax Advisory
· 5 min read
A group modelling a Hainan investment over a five-year horizon is modelling across a policy boundary. The three reliefs that make the Free Trade Port worth choosing on tax grounds were each renewed during 2025, separately, by different instruments — and all three now carry the same expiry: 31 December 2027. Whatever follows that date has not been published. Any model that assumes the current rates continue past it is making an assumption, and it is worth making that assumption explicit rather than letting it sit inside a spreadsheet unlabelled.
What was extended, and by what
The corporate income tax package came from the Ministry of Finance and the State Taxation Administration in 财税〔2020〕31号 of 23 June 2020. Its face text ran to 31 December 2024; it was continued by 财税〔2025〕3号 of 12 February 2025 to 31 December 2027. The individual income tax cap for high-end and urgently needed talent came from 财税〔2020〕32号 of the same date, and was continued by 财税〔2025〕4号 to the same 31 December 2027. The implementing detail for the talent policy was then rewritten by a five-department announcement in Hainan on 5 September 2025, which replaced the guidance that had stood since 2022.
The three reliefs and the instruments extending them
- 财税〔2020〕31号 — Ministry of Finance and State Taxation Administration — 23 June 2020 — three reliefs: the 15% corporate income tax rate for encouraged-industry enterprises in substantive operation; exemption from corporate income tax on income from new outbound direct investment by tourism, modern services and high-technology enterprises; and accelerated or immediate deduction of capital expenditure.
- 财税〔2025〕3号 — Ministry of Finance and State Taxation Administration — 12 February 2025 — extends the above to 31 December 2027.
- 财税〔2020〕32号 and 财税〔2025〕4号 — Ministry of Finance and State Taxation Administration — the individual income tax burden above 15% is exempted for qualifying high-end and urgently needed talent, extended to 31 December 2027.
- Announcement of five Hainan departments on implementing the Free Trade Port individual income tax preferential policy — Hainan Department of Finance, Hainan Tax Service, human resources, market regulation and talent authorities — 5 September 2025, applying from 1 January 2025 — source of the 183-day residence rule, the 90-day floor and the filing windows.
- All positions above verified against the issuing bodies' published texts in September 2026.
The capital expenditure relief is the one most often left on the table
Alongside the headline rate, 财税〔2020〕31号 allows an enterprise established in the Free Trade Port to deduct in full, in the current period, newly acquired fixed assets or intangible assets with a unit value of no more than RMB 5 million — with fixed assets here meaning assets other than buildings and structures. Above RMB 5 million per unit, the enterprise may shorten the depreciation or amortisation period, or apply an accelerated method. The implementing announcement runs from 1 January 2025 to 31 December 2027 and reaches audit-assessed second-tier branches and the establishments of non-resident enterprises as well.
This relief is a timing benefit rather than a permanent one, which is exactly why it interacts with the 2027 date. Capital expenditure brought forward into a year when the relief exists is treated differently from the same expenditure incurred after it lapses. For a business with a genuine equipment or software programme, the sequencing question is real and has a deadline attached to it.
The talent cap now has a residence floor as well as a threshold
The individual income tax policy exempts the burden above 15% for qualifying high-end and urgently needed talent. The September 2025 implementing announcement kept the requirement of 183 days of cumulative residence in Hainan but softened how it is counted: reasonable off-island business travel, leave and training days count towards residence, provided actual residence does not fall below 90 days. It also created a track with no residence threshold for personnel in aerospace, shipping and offshore oil and gas exploration, conditional on at least six months of continuous pension contributions without lump-sum or dual-location payment and a labour contract of a year or more.
Administration moved in the same direction. Most qualifying individuals are processed through inter-departmental data sharing without filing an application at all. Special-industry personnel apply through the provincial electronic tax system by 1 March each year, and individuals resident between 90 and 182 days go through a public-posting step before applying by 30 June.
Three separate instruments, three separate extensions, one shared expiry date. The convenience is that you only have to remember one.
What this changes about planning between now and then
- State the post-2027 assumption explicitly in any model, rather than extrapolating the current rate silently.
- Sequence capital expenditure against the relief window where the business has a genuine programme of asset purchases.
- Track the individual residence day-counts for the people the talent cap is being claimed on, during the year rather than after it.
- Diarise the two filing windows — 1 March for special-industry applications, 30 June for the 90-to-182-day route — since neither is prompted by the ordinary payroll cycle.
- Re-read the extending instruments rather than the 2020 originals, whose face text has already expired once.
How we hold the position
Preferential tax position support means keeping the three reliefs documented as live positions with named instruments and known end dates, rather than as assumptions inherited from whoever set the structure up. That includes the evidence behind each claim, the calendar the filings sit on, and a standing note of what expires when. When the successor policy to the 2027 date is published, the work is to read it against the positions already held — which is a short exercise if the positions were documented and a long one if they were not.
This is general commentary on published policy, not entity-specific tax advice. Figures cited are drawn from the instruments listed above and were verified against the issuing bodies' published texts in September 2026. Validity periods are stated as published; confirm currency before relying on any figure.