Job Discussion Forums

peabocardigan · Joined: 14 Jun 2005 Posts: 63

My school says that my contract only stipulates that they will 'provide a single ticket allowing the FT to return to his/her country of residence upon successful completion of the 12month contract' but that that this does not include the tax on the airline ticket. So they want me to pay an additional RMB600 for the tax paid on my ticket home. My contract also says that 'The flight allowance shall be subject to tax' which doesn't mean anything to me.

Any pointers on what I should do? I am tempted not to give the money to them since I already have the ticket but am worried that they'll just take it ouf of my last salary or delay my salary overall. They are certainly on the ball when it comes to money. In regards to everything else, zilch...! Private universities in China, eh?

tw · Joined: 04 Jun 2005 Posts: 3898

Check out this thread

peabocardigan · Joined: 14 Jun 2005 Posts: 63

As I said, the tax is the tax paid ON the airline ticket and the kind of tax that anyone would usually have to pay in addition to the actual flight price. Just in the university's case they have decided that they are only liable to pay for the flight and not the tax on it, which I guess is within the reach of the contract but bad style and extremely cheap I guess. It's their way of saving money at the end of the year.

Needless to say that the FTs, or rather those that are still here after 12 months (2 left overnight and early) here are pretty cheesed off about this whole matter.

peabocardigan · Joined: 14 Jun 2005 Posts: 63

ps: I am teaching at a private university in Xi'an, just in case anyone in this forum is about to get recruited by any such institution...

cj750 · Joined: 27 Apr 2004 Posts: 3081 Location: Beijing

if in the contract it sez "subject to tax"..you pay it...
In the furture..."after taxes and to incl. taxes are very important features of a contract...

tw · Joined: 04 Jun 2005 Posts: 3898

Roger · Joined: 19 Jan 2003 Posts: 9138

I have frequently enough over the years pointed out the likelihood that we foreign nationals are going to have to contribute our dues to the national coffers of our host country. I am none too eager to do so myself but at least I have first-hand knowledge of how it is done, and how people often escape what many CHinese cannot avoid...

Tax is owed on all and any material benefits we derive from a remunerated job; some even were - I do not know if this is still being done! - made to pay a Chinese tax on their income, royalties or other revenues generated in their home countries (royalties as in the case of authors of books). It could so happen that your Chinese salary tax amounted to a few kuai while your dues on royalties or your salary transferred by your foreign employer (say, if you work in a JV) to your bank account were hugely bigger.
To come back to the tax on airfare: yes, some of us have no choice but to pay tax!

My FAO informed me that if the university remitted our airfare to our bank account we FTs would have to pay upward of 10% (I think it is 15%) in tax.
So the university chose to pay out our entire bonus (travel allowance plus airfare combined in one end-of-the-term payment) in cash.
We pay no tax.

cj750 · Joined: 27 Apr 2004 Posts: 3081 Location: Beijing

True as Rog sez..all income is taxed and that is what the FAO may have ment...and if paid for the ticket may be taxed.
Yes sales taxes are unheard of in China, but the FAO may hve been talking about tax for the income of the amount of the ticket.. I would not be so quick to tell the FAO that plane tickets have SURCHARGES and he has made a mistake. First clearify what you are talking about..tax on income use to pay for the ticket..or sales tax or surcharges to be paid.

Keath · Posted: Thu Jun 23, 2005 10:37 am Post subject:

Um.. There is no "Income" for the ticket if it is a cost.. This is a popular FAO scam.. Have them buy the ticket directly.. The airline ticket is NOT salary, it is NOT extra income.. It is a direct cost that the school needs to shoulder.. Explain it to them in those terms and introduce the FAO to the concept of interest for each day they dont pay it and it is late.. In fact in all our contracts, we now have interest included for any school that pays late.

IF YOUR FAO INSISTS ON THE TAX ASK TO SEE THE "FA PIAO", OFFICIAL TAX DOCUMENT PROVING THAT THE "TAX" IS BEING PAID. ASK FOR FA PIAO.. Then watch your FAO Face contort.. Hahaha.. Let me know how that goes.. These FAOs cannot invent tax even though the words are in your contract.. The only "tax" may be a airport tax but I think that even those have been removed (From Shanghai and Beijing as I recall)

Certainly it doesnt tell you the TAX rate in the contract right? Of course it doesnt.. It sounds like the magic floating rate which is set by the village FAO chief.. hoba - haba - hoba - haba - hoba - haba (chanting dancing around fire)

Regards,

Keith
www.journeyeast.org

tw · Joined: 04 Jun 2005 Posts: 3898

peabocardigan · Joined: 14 Jun 2005 Posts: 63

Thanks for all your messages. Here is what went down today:

Basically, there is a part ON the airticket that says tax and on my ticket the amount of RMB525 is printed on that line underneath some other costs. It's a standard-looking airline ticket, the kind that we've all had in our hands before. My contract specifies that the school buys us our return ticket home whereas the school says this does not include the tax. My Foreign Affairs Officer says that this is a NEW regulation that the university had decided on recently to 'streamline management' or some other baloney. To this I replied that they would have to change the contract for that first since mine stipulates that they have to buy me a ticket home and the tax price is INCLUDED in the ticket which is why it is ON the ticket. Since they already took the money out of last year's flight reimbursement I explained to him that I now consider this money owed to me by the university. He will now take the issue to the Foreign Affairs Director, one notch above him.

Also, I have already made an appointment with the Foreign Affairs Director for tomorrow. It's an issue I am not willing to let go. Rumour has it that the Foreign Affairs Office in my school is being forced to tighten its budget after years of waste. In effect, the current FAO has previously been known for leaving the booking of homeflights up until the last minute. Thus, he has basically bancrupted his office by buying flights at extortious rates for which they are now trying to make up on our backs and against their contractual obligations.

Thanks for all your pointers. I'll keep you posted.

PS: ROGER- I do pay income tax in China. I am getting the school to pay it every month so I can get receipts and change money. They only do it for the FTs that ask though since they only pay the tax if you need the receipts for exchanging RMB to foreign currency. They even told us that they are doing this, just with less words... Anyhow, that's how my school contributes to THEIR country's national coffers.

peabocardigan · Joined: 14 Jun 2005 Posts: 63

PS: As I said and Keath also seems to have argued this-the whole issue has nothing to do with income and tax paid on income since this is a cost (hence airline) they agreed to pay in their contract and is not a cost that has been incurred as income. It's an invention of the Foreign Affairs Office to save or skim money on and off the foreign teachers here. If this amount they want me to pay (RMB525) was income tax it would almost be more than the university paid for my salary in a whole year (usually RMB40-50/month). And that just doesn't add up at all...

peabocardigan · Joined: 14 Jun 2005 Posts: 63

I had a meeting with the FAD and FAO and they admitted that charging the tax was a mistake and not within the scope of the contract. They will now repay me my money. End of story...