Job Discussion Forums

[Itsme]

I'm hoping a smart reader out there can shed some light on my situation. Even better would be a suggestion on how to go about solving the
problem, if a problem be found.

1) The contract is a little complex. There are a total of 4 parties. Party A is a school in Australia that I am "representing."
Party B is the person who set up a joint cooperation between party A and the school that I am at now.
Party C is a law firm that has delt with all the legal issues and which is responsible for paying my salary.
Party D is me.

My main concern is the amount that should be paid on income tax, the fact that I think that too much is being taken out, and how I can fix the problem since it is a law firm that is handling the taxes and paying my salary!

2) First, I get the feeling that something is not quite straight forward as my contract states that I get a base salary of 3000 RMB and then the rest of my salary (4000) is split up into categories such as (food allowance, communication allowance, traffic allowance.)
Why all the categories? Are they evading taxes in this way?

3) I go in to receive my salary the other day and I am presented with what I gather is the "official" receipt which is only a page stating how much money I am being paid and the place where I am supposed to sign. What is the official tax receipt supposed to look like?

Now this is where it gets interesting. The amount that I am being taxed is my salary - 1600. 1600 is being considered exempted and not the 4800 RMB that I have seen as being the exemption for foreigners on several web sites.

Now. How can I possibly bring this up when I am dealing with the director of a law firm? I need some pretty authentic documentation. Any suggestions?

I tried the number 96900 but received the message that it is an invalid phone number.

A copy of the law is found on http://www.novexcn.com/personal_icm_tax_99.html but I didnt find anything about a 4800 RMB exemption. The website is from 1999 however.

I also visited the chinese embassy which has the article
http://www.china-embassy.org/eng/gyzg/t234297.htm which states that foreigners IN BEIJING have a cutoff raised. How can I be ready for a "this is not Beijing" argument?

Another website http://www.jobs.gov.hk/eng/mainland/jobseeker/general/3c1_5.asp is from Hong Kong.

Where can I find out exactly what I should be paying? One might think that a lawyer would be the one to ask, but a lawyer that is in charge of paying my salary might not. How can I possibly argue with a lawyer on a matter of Chinese law? I must have some pretty good sources to back me up. Can anyone help me out? Thanks!

[WordUp]

Wow.. This contract sounds dodgy mate.. 4800 is the non-taxable allowance, you are taxed on anything above it according to a sliding scale that starts around 15%..


They paper they asked you to sign is very likely not a tax document. Its just a peice of paper that represents that you received your salary, your signature constitues that you received it, though If it were all in Chinese, I wouldn't sign it.. or to avoid a hassle and get your money, I'd write in English AS MY SIGNATURE the following: "I am signing a document that has not been explained to me for the purpose of receiving money that I assume is payment for services rendered.." Just tell them you legal name is really LONG... (the lawyer should enjoy that one)

If they are deducting COSTS than I believe it should be in your favor, it doesnt make sense to be taxing a reimbursement for Gas (for example) or any type of living expense so long as there is a receipt involved. Your salary of 3000 should be tax free, plain and simple. Make sure you bring that up with this savvy lawyer.. and don't be afraid just cause this guy is a lawyer.. You've got rights. By the way, if he says for you to show him documentation, ask him to prove you wrong.. Tell HIM to show you documentation to the contrary, its his responsibility as your employer to provide this anyhow..

Where are you working and what kind of school is this.. It sounds like a private school that doesnt have the proper permission to host teachers.. Otherwise there would be no need to have several parties involved unless a) a recruiting company is garnishing your salary and hosting you on a renewable F visa b) there is another party who is leasing their permission to host foreigners to your school..

Whenever you have several parties involved you have to determine who is your true employer.. Thats who you need to go to to resolve the issues.. But keep in mind the pressure point is always with the school cause at the end of the day, if you are getting dressed down by a rogue party and not getting paid what is illustrated in the contract.. Than you have no reason to work and the contract is a breach.. But thats why these types of contract suck hard, the students end up losing, and in most cases so does the school..

But maybe by asserting pressure on the school by refusing to work until you are paid accordingly, you can let the Chinese deal with the Chinese (school deal with parties B and C) to win a solution in your favor..

Good luck with that.. and by the way.. Get the hell outta there as soon as its reasonable..

PS> If you inquired, I bet your school would let you see the agreement between them and the recruiter.. See if you can get a peep at it.. and let us know.. I'm sure its a doosey..


from journeyeast.org
ABOUT RECRUITERS AND BAD CONTRACT SCENARIOS
4. Beware of Salary Garnishing! Salary and earning formulation should be based on several factors, 1) Your education, 2) Your experience, 3) The number of periods you will be working, 4) The geographical location of your school in China. If you don't have a college diploma and you are offered a job for a lot of money each month you are likely to earn that salary the hard way. Yet, if you do have a college diploma, and you are offered substandard wages there is a chance that your recruiter is garnishing a portion of your salary for their own pockets. Directly inquire of the company if they are garnishing your salary and if the contract you will be signing is with the company or with the school.
6. Be wary of signing a contract with a company: Some private training centers send invitation letters from registered manufacturing companies or other types of companies and these contracts are usually for 6-months or less. This is because they operate under the umbrella of that company and it is not the same as signing a contract with a Chinese Educational Consulting Company. If you are signing a one-year contract with a Chinese Educational company than chances are very good it is not a standard SAFEA contract, you will have far more restrictions imposed upon you. Another important consideration is how you will go about resolving issues should salary or benefits be late. If you are signing a contract with a company, the typical model for this type of cooperation is that the school has paid your agent all of your salary for the semester and the Chinese company is paying your salary (and likely garnishing your wage) so if the recruiter goes out of business, has money problems and cannot afford to pay your salary on time it creates an enormous problem. Here is why: The school technically paid your salary to the agent already. If the agent doesn't pay you, the typical reaction after several times would be for you to threaten to stop teaching until salary is paid. The school of course will tell you it isn't their fault and you will be put into the middle of a very uncomfortable situation while your students will be the ultimate victims. No matter how bad you feel, you should not teach until the salary issue has been resolved. Whatever arrangement the school made, you should leave it for them to resolve with your agent. An agent also can mean more opportunity for problems as conflicts between schools and agents can involve the teacher and disagreement over the right for your recruiter to use you for their own promotions.. You will often have far less legal recourse and confusion on which party is the responsible party should things begin to break down. Moral of this story, is sign your contract directly with the school whenever possible.

[cj750]

[Itsme]

What I mean is that instead of being given the first 4800 RMB tax free, I am only being given the first 1600 RMB tax free.

If I go in there and tell the lawyer that he is wrong, I should be able to provide some sort of proof other than the fact that I read something off of the internet. Is there a real phone number to call or should I look for a tax consultant (any suggestions?) or is there an official and updated website which states the updated law that I could use when entering his office?

[Bro D]

Maybe he should be providing some kind of proof to you that you only get the exemption on 1600. Ask for the official website link and tell him that you can produce one (he doesn't need to know where from) that backs up your 4800 claim.

[Steppenwolf]

Hmmm,, and how much "tax" is being deducted from those items then?

Another question: is the structure of your empoloyment such that the authorities might infer you get some pay in Australia?
Officially, foreigners have to pay tax to the Chinese taxman even on income realised in their home countries (a rule that may have been abolished since China's accession to the W.T.O.).

[cj750]

I am looking for a doc that will tell you the Chinese law...will be back in my shop tomorrow and hopely will find it then....

[Nyrthak]

I had a similar problem. The school I was at wanted to tax me at the Chinese person's rate. What I did was search the internet for anything I could find. Came across a few websites: www.china-embassy.org has info on foreigners tax level being 4,800 yuan, http://forum.tdctrade.com had some info, www.osec.ch also www.dezshira.com. Then I printed it all out, stapled it together. Made one copy for me, one for the manager and one for the accountant and gave it to them. They checked it out...it was correct and I was taxed at the foreigners rate. I have a tax department phone number for Jiangsu Province (not sure whether it is for the whole of china or not): 12366. They will be able to tell you how your tax should be charged. I got a Chinese friend not associated with the school to ring them. As for reciepts - I had to sign a piece of paper with the amount of income I had recieved every month. The tax reciept is the official slip from the tax department with the red chop on it. If your employer cannot produce it for you, you need to ask whether they are taking tax off you, but not actually paying it to the tax department i. e. it gets "pocketed" along the way. Good luck!

[ymmv]

Right. What Nyrthak said.

There's an old post on Dave's about this, but Nyrthak's post ties it all together. I had a similar experience but in the end, the FAO wanted to call the local tax bureau and only then did they *mingbai*.

Bottom line: what Nyrthak said - hand the lawyer the phone number to the local tax bureau and have him pick up the phone and make the call.

[WordUp]

..and when you do that.. give him a little *wink* and a nod..
Tell you you'll expect that report on your desk first thing in the morning..

Then present him with another document which is the balance of what they owe you for having made an "Honest " Mistake.. then thank him profusely saying you're so glad he was able to help you, and so happy he is an honest lawyer not one of those bad language mill type directors who exploits foreign teachers ignorance on tax law.. Ham it up and enjoy it..

[Bayden]

[Itsme]

Does anyone know the official website to quote info from ?