Job Discussion Forums

[mondrian]

I have just moved to another uni and the local admin are muttering the dreaded word "tax" at me.
So far here in China I have received my salary nett of tax.
The reasons the admin give for intending to charge me tax are: I will be earning more than 4500 RMB a month; and they cant find the relevant "Document number" which gives the Chinese legal position for UK-PR China reciprocal tax exemption.
Please can anyone help me establish what is the position for a UK citizen working here in China?

[tw]

[Volodiya]

The first 4000 RMB of monthly earnings being exempt from Chinese income taxes makes the sums FTs pay in taxes rather small (tax is collected only on the sums in excess of 4000/month of taxable earnings).

[Roger]

[Volodiya]

No, Roger, that didn't escape my attention. What part of my, and others, answers, did not address the OP's question, that your answer did?

[Mideatoo]

bis

[englishgibson]

Mondrian, Chinese business accounting practices are that they keep "two books", one for themselves and one for the government. It is correct that 4,000 RMB a month exempts a foreigner from paying any taxes in China. My suggestion is that you have a nice chat with your employer and ask him/her to use that 4,000 RMB as your official monthly salary for your employer's accounting books as well as for the government.
Cheers and beers

[bigroh73]

It seems that both Roger AND Volodiya have both missed the point. TW said it completely - "foreigners in China must pay taxes..." - that is the perfect answer.
The query of being a UK citizen is totally irrelevant. He was not questioning whether he is liable to be paying taxes back in the UK as well as in China, etc.....which for some people - this is an issue.

That being said - In my 5 years in China, i have not known too many teachers who actually pay tax. Public universities quite often tell you that you are paying tax, but they avoid this by splitting your salary on 2 or 3 different forms - (fake teachers that don't exist) and then pocketing the tax money themselves. My first job in China was like that.
If they are legitimately paying your tax properly and above board, then you should receive a monthly tax receipt that clearly shows your name, passport number and states (in chinese) that tax has been paid, it will be chopped by the relevant authorities.
Push your employer for a copy of that certificate, go on!
9/10 times, i bet they will find many excuses why they cannot give you a copy of it.......then you know what they're up too.

I'm sure there are some "honest" (can this word be used in China.??) employers here in China (i don't know any) that would do the right thing. I know that most of the official International Schools (SAS, SIS, etc) do pay their teachers' tax properly, and they receive proper certificates - but when students are paying that sort of tuition - that should come as no surprise.

Private language schools/colleges are definitely much worse. Every month I sign 2 or 3 different pay slips - under assumed names of course, so each teacher (that i sign for) receives under 4500rmb, etc...
They do that for every teacher - and this schools has been around for over 8 years in Shanghai I believe.

Of course, legally speaking - every accountant, lawyer, consultant, government official - will clearly state that everyone must pay tax, especially foreign workers. But - THIS IS CHINA - and what people say, and what people do - is seldom the same.

[hengyangdave]

When I see my chinese boss paying tax....I will!

[Keath]

Technically you shouldnt have to pay ANY tax in the first 90 days in China. Afterwards, you should have to pay something like 10-20% on ONLY the amount above 4,000 RMB.

So, your tax should be 20% on the 500 which is 50-100RMB.

Your after tax salary should be 4,350 - 4,400 RMB
There's a sliding scale applied to the amount above 4,000 but it changed in the last year and I'm not familiar with it anymore.

Keith
www.journeyeast.org
TEACH ENGLISH IN CHINA
(773) 532-9988 FREE PRE-TRIP CONSULTING

[bendan]

There is a tax treaty between the UK and China that exempts citizens of one country teaching in the other at a college or university (recognised ones) for the first two or three years, but it all seems a grey area in terms of whether it applies to people coming to China to teach English. I think it was intended for academic exchanges. You might be able to pursue the matter, but I doubt you'd have much luck.

Normally, you pay tax on earnings of over 4000. As has been written many times before, you pay 5% on the first 500 (from 4001 to 4500), 10% on the next 1500 (from 4501 to 6000), 15% on the next 3000 (from 6001 to 9000) and 20% on the next ten or twenty thousand. It goes higher, but that's not relevant to an FT.

If you earned 4500, you'd pay 25 in tax. On 6000, you'd pay 175. On 9000, you'd pay 625.

[Brian D. Granberg]

The question about the proper taxes to be paid by a foreign teacher is as perplexing as many other things here. I am in my third position in China and each employer has taken a different position. I would not worry about the tax situation except for the fact that I send money back to the USA monthly as child support for my dependent child and to send it I must provide proof of taxes paid.
I would not have responded to this except for the fact that the opinions about this subject have varied so greatly and contradicted themselves so much. The last message by "Bendan" is correct, the tax that is required to be paid on a salary of 5000 RMB per month is 75 RMB.
The college that I taught at last year told me that my taxes needed to be paid because if I did not have proof that I had paid my taxes when I am ready to leave the country, I would not be allowed to leave until I did.
Since then, in talking to other teachers who have left the country and came back multiple times, I realize that the colleges statement was bs. So if I did not have to send money back to the USA each month, I certainly would not be concerned with paying taxes here.
After much work I found out that in my present job the school district pays for my taxes which was good news. The problem is that I still need proof that somebody is paying my taxes and when confronted with that need the school district's reply was that proof of individual taxes being paid is "impossible."
Just as a sidelite, in reference to bureaucracy here in China. I send the money via Moneygram. The process in the USA to send money anywhere in the world takes at most about ten minutes, even with the most intellectually limited 7/11 employee. The process in Thailand, took on the average, about 50 minutes. Here in China, the first time the process took 125 minutes and each subsequent time has taken longer!
To the Chinese banking credit though, during my long waits I was kept with the constant supply of hot tea, even though the temperature was in the high 30s!