12 July 2023
The Shenzhen Municipal Tax Service, State Taxation Administration (“the authorities”) issued the “Notice in relation to the Adjustments on the Shenzhen Municipal Individual Income Tax Deductions and Exemptions Standards for 2023” (“the Notice”) on 12 July 2023. The authorities announced that individuals and their employers terminating their employment relationship will receive a one-off compensation income. The portion of the compensation income received that are within three times of the average local salary in the previous year is exempted from individual income tax. The tax exemption threshold for the one-off compensation income obtained from the termination of employment relationship between individuals and their employers in the Shenzhen Municipality has been adjusted to RMB494,262. The threshold adjustment shall be implemented starting from 1 June 2023.