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XiaoWren
Joined: 05 Aug 2016
Posts: 54
Location: Asia
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 Posted: Sat Jan 07, 2017 4:10 pm Post subject: Tax |
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So my first university paid my flight and travel allowance in cash thereby avoiding tax me. This year my new university paid these allowances through my bank account with my salary and they were taxed.
I raised this with the finance department, but they are not moving on it.
I understood that in general allowances and expenses are not taxable (in most countries).
Any ideas or info on this? Thanks |
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Non Sequitur
Joined: 23 May 2010
Posts: 4724
Location: China
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| Posted: Sat Jan 07, 2017 5:30 pm Post subject: |
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I don't think 'General allowances' and 'expenses' can be lumped together. Refunding an expense should not be taxable as all that is happening is that you attended to an item that the employer would normally pay for. Usually you would have a receipt.
General allowances would normally be regarded as taxable income.
That's why I've been concerned to see airfares devolve over the years from a refund to an allowance. Clearly exposing them to tax. |
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XiaoWren
Joined: 05 Aug 2016
Posts: 54
Location: Asia
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| Posted: Sun Jan 08, 2017 12:54 am Post subject: |
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Well, I'm using the terms 'allowance' and 'expense' imprecisely and incorrectly.
But anyway the finance dept said 'there is no real ticket' (I had not flown anywhere), whereas there was a ticket in the first example - although I don't recall producing it.
Ditto the travel allowance. I didn't produce any receipts in either case but wasn't taxed in the first example. |
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getbehindthemule
Joined: 15 Oct 2015
Posts: 712
Location: Shanghai
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| Posted: Sun Jan 08, 2017 6:26 am Post subject: |
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| I know my airfare allowance is tax free as long as I can produce e-ticket and boarding pass. If I cannot, it is taxed at 20%, which kind of sucks! |
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Non Sequitur
Joined: 23 May 2010
Posts: 4724
Location: China
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| Posted: Sun Jan 08, 2017 6:44 pm Post subject: |
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| getbehindthemule wrote: |
| I know my airfare allowance is tax free as long as I can produce e-ticket and boarding pass. If I cannot, it is taxed at 20%, which kind of sucks! |
Have you tried getting a refund without a receipt at home.
Why does ordinary legit business practice in China attract such puzzlement, when you would comply without question in your home country? |
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Alien abductee
Joined: 08 Jun 2014
Posts: 527
Location: Kuala Lumpur
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| Posted: Mon Jan 09, 2017 2:44 am Post subject: |
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| getbehindthemule wrote: |
| I know my airfare allowance is tax free as long as I can produce e-ticket and boarding pass. If I cannot, it is taxed at 20%, which kind of sucks! |
The whole purpose of your airfare allowance is to buy and use an air ticket. If you don't use the money for that purpose why shouldn't it be taxed? Sound business practice in my opinion. |
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lionheartuk
Joined: 03 Jun 2005
Posts: 173
Location: Guangdong
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| Posted: Mon Jan 09, 2017 2:49 am Post subject: |
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Can't see any problem with being taxed on something that is given freely
I get airfare and am taxed on it but I am happy to be given something for nothing especially when I am not going anywhere by air. |
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XiaoWren
Joined: 05 Aug 2016
Posts: 54
Location: Asia
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| Posted: Mon Jan 09, 2017 4:38 am Post subject: |
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| getbehindthemule wrote: |
| I know my airfare allowance is tax free as long as I can produce e-ticket and boarding pass. If I cannot, it is taxed at 20%, which kind of sucks! |
Yes, I think we are confusing 'allowances' and 'expenses' and also the flight ticket and the travel allowance.
For tax authorities these categories have precise meanings.
I think an expense (i.e. flight ticket or hotel cost incurred in the course of your duties) is fully refundable and not taxable. So that where there is 'no real ticket' the payment will become like taxable income.
Allowances are always taxable, I think, as an addition to your salary (like getting luncheon vouchers for example). I'm not sure what the travel allowance in my contract is actually intended for - travel to work or some trip around China....? But it is anyway 'income'. Nervertheless, it was taxed on one occasion but not another.
Anyway, I agree, more tax, always sucks. |
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getbehindthemule
Joined: 15 Oct 2015
Posts: 712
Location: Shanghai
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| Posted: Mon Jan 09, 2017 7:57 am Post subject: |
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| Non Sequitur wrote: |
| getbehindthemule wrote: |
| I know my airfare allowance is tax free as long as I can produce e-ticket and boarding pass. If I cannot, it is taxed at 20%, which kind of sucks! |
Have you tried getting a refund without a receipt at home.
Why does ordinary legit business practice in China attract such puzzlement, when you would comply without question in your home country? |
Fair point.
But I remember my first contract, I got my full allowance (tax-free) without having to show boarding cards. But this changed two years ago for me. Also fapiao from taxis, metro card top-up, etc. could be used to claim back the full amount. Not anymore. |
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XiaoWren
Joined: 05 Aug 2016
Posts: 54
Location: Asia
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| Posted: Wed Jan 11, 2017 12:48 pm Post subject: |
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| getbehindthemule wrote: |
| Non Sequitur wrote: |
| getbehindthemule wrote: |
| I know my airfare allowance is tax free as long as I can produce e-ticket and boarding pass. If I cannot, it is taxed at 20%, which kind of sucks! |
Have you tried getting a refund without a receipt at home.
Why does ordinary legit business practice in China attract such puzzlement, when you would comply without question in your home country? |
Fair point.
But I remember my first contract, I got my full allowance (tax-free) without having to show boarding cards. But this changed two years ago for me. Also fapiao from taxis, metro card top-up, etc. could be used to claim back the full amount. Not anymore. |
Here is another question: If your flight ticket was less than the amount specified in your contract have you been paid the difference (as taxable income), or were you only paid the exact amount of your ticket?
Also, if applicable to you, have they at any time made a distinction between a ticket that was local (a trip in Asia) or to your country of origin?
I wonder if they would query a first class ticket? |
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getbehindthemule
Joined: 15 Oct 2015
Posts: 712
Location: Shanghai
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| Posted: Thu Jan 12, 2017 12:51 am Post subject: |
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| XiaoWren wrote: |
| getbehindthemule wrote: |
| Non Sequitur wrote: |
| getbehindthemule wrote: |
| I know my airfare allowance is tax free as long as I can produce e-ticket and boarding pass. If I cannot, it is taxed at 20%, which kind of sucks! |
Have you tried getting a refund without a receipt at home.
Why does ordinary legit business practice in China attract such puzzlement, when you would comply without question in your home country? |
Fair point.
But I remember my first contract, I got my full allowance (tax-free) without having to show boarding cards. But this changed two years ago for me. Also fapiao from taxis, metro card top-up, etc. could be used to claim back the full amount. Not anymore. |
Here is another question: If your flight ticket was less than the amount specified in your contract have you been paid the difference (as taxable income), or were you only paid the exact amount of your ticket?
Also, if applicable to you, have they at any time made a distinction between a ticket that was local (a trip in Asia) or to your country of origin?
I wonder if they would query a first class ticket? |
My airfare allowance is 8k. To get the full 8k I need to produce fapiao + boarding cards to the value of 8k. If I do not meet the 8k it is taxed at 20%. Prior to 2015, I could also produce both taxi & metro card top up receipts. This was since capped to 1k.
To answer your question, Summer 2015 I did not fly back home so couldnt meet the 8k, I did however get paid the difference as taxable income.
Flight type (domestic or international) or flight class doesnt matter with my company anyway. |
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