Job Discussion Forums

[tw]

My annual vacation pay of 2200 RMB came out to be less than 2000 RMB because the school dinged taxes off it by adding it to my monthly salary, thus causing a higher tax percertage.

[boxcarwilly]

http://english.tax861.gov.cn/zgszky/zgszky09.htm

[jeffinflorida]

They seem to believe that the tax calculation goes like this... (salary - 4800 ) then times 13%. then the balance is taxed at 10%. They told me this company has a special deal with the gov't to tax only at 10%.

So with these figues my tax rate will be about 50 rmb a month. +/-

If they only tax me at 50 or so rmb a month I will not complain.

And a link posted above says no tax for the first 90 days. This fact anyone know?

[bendan]

If you don't have a visa, you are not paying tax; someone is pocketing it.

Boxcarwilly posted the link to the correct info, so I'd ignore the rest if I were you.

This might save you calculating it:

Taxable income - tax payable

4800 - 0
5000 - 10
5500 - 45
6000 - 95
6500 - 145
7000 - 205
7500 - 280
8000 - 355
8500 - 430
9000 - 505
9500 - 580
10000 - 665
11000 - 865
12000 - 1065
13000 - 1265
14000 - 1465
15000 - 1665
16000 - 1865
17000 - 2065
18000 - 2265
19000 - 2465
20000 - 2665

So, if cheekygal is paying 16% on income over 4800, she should be earning about 14,500.

[boxcarwilly]

As many of us already know, as of 1/1/07 the tax reporting laws in China changed for us earning 120,000 RMB or more per year or on average, 10,000 per month. The deadline for filing for calendar year 2006 is March 31, 2007. The requirement is to file once a year by the 31st of March of the following year. If you can read Chinese, you can file electronically. See the following website:

http://www.tax861.gov.cn/

The paper version of the filing can be filed in person at the smaller local tax bureaus scattered around Beijng and at the main tax bureau in the smaller cities.
There are more details to the filing for example other income domestic and foreign that should be reported.

[cj750]

[HunanForeignGuy]

There are two on-the-books sets of laws regarding taxes in China.

Citizens of the PRC begin to pay taxes when they hit a threshold of RMB 1,600 and then the income tax kicks in at about 5%, but escalates rather quickly after that.

The previous poster who wrote that there are no taxes for U.S. citizens for the first 90 days wrote erroneously. I discussed his "idea" with the tax office here in GZ and they thoroughly debunked it.

Next, those who are not citizens but who are residents of the PRC pay taxes beginning with a threshold salary of RMB 4,800 per month. This amount tends to be revised upwards on an annual basis but this is the figure for this year.

The first RMB 1,000 OVER RMB 4,800 per month are taxed at a rate of 5%. Then it begins to escalate rapidly until it reaches a maxium ofr about 33% of the amount.

Kevin is quite lucky that is school is not familiar with the tax situation for foreigners.

RMB 12,000 per month minus RMB 4,800 leaves a taxable income of approximately RMB 7,200 and if one consults the tax tables for foreign nationals in the PRC, then the taxable rate for that amount would be approximately 33%.

For those in Southern China, I urge extreme caution here. Under the recent changes in the tax structure, and particularly upon orders from Beijing, Guangdong, among others, has begun applying the tax laws quite uniformly.

If you are working in Guangdong, please ensure that at the end of your contract your school provides you with an OFFICIAL TAX RECEIPT, duly stamped from the local tax office. You may be required to produce this to the PSB should you wish to continue working in Guangdong. T|hat is how the law stands now. A letter from the school with its stamp is not sufficient by any means.

Next, you should know that there are different tax offices for the different kinds of schools.

If you are working in a training center, aka language mill, then for sure your tax will be handled by the local taxation office. If you are working in a government institution with any kind of military or direct Beijing affiliation, your tax will be paid to a special office, different from the local tax office. Additionally, if you are working in a provincially-funded institution, your tax may or may not be paid to again another totally different tax office, depending upon the charter of the school.

To C|J750, I can sympathize with your situation. I went through one of those recently.

We were being taxed to death on everything -- from income, to bonuses, to travel allowance, to airfare reimbursement. One of the foreign teachers smelled a big rat and went to the tax office. There was no record of any tax payments received by the tax office --- and they checked with all of the tax offices that I mentioned above -- for ANY foreigner in the school. We went back to the school with that and were given the run-around until we simply told them that either they would produce a tax receipt at our request or they could produce a tax receipt at the request of the tax office.

Well, next pay period, all of our "back taxes" were recredited to our bank accounts -- I wonder why -- and the next period, no taxes were taken out, the school having assumed the burden.

So for all of you newbies and for all of you oldies, DO NOT roll with the punches regarding taxes. If you pay here, you are entitled on a receipt, both on a monthly basis and on a yearly basis. And the only receipt that matters is the one from the tax office, signed and stamped.

The monthly proof-of-tax paid will be most likely in the form of a fax from the tax office, to the school, stamped, listing all of the names of those paid taxes. The yearly receipt will resemble most tax forms that Westerners are familiar with.

Next, these are the provinces and areas of the country in which Beijing has put great pressure on the local provincial governments to clean up their tax collection and to implement the laws on the books:

1. Guangdong
2. Fujian
3. Chengdu
4. Jiangsu
5. Zhejiang
6. Beijing
7. Shanghai

so that if you live in one of these areas, you absolutely must insist upon a tax receipt if you are paying taxes.

Next, the previous poster who wrote that taxation transcends legality of employment in China is ABSOLUTELY correct. And now I will explain this so that all can understand.

When citizens of the PRC are taxed, this is done by means of their Identity Card Number, akin to the Social Security number used in Canada and the United States.

Foreigners obviously do not have a PRC Identity Card Number BUT

they are taxed by means of their passport number, not their corresponding Chinese visa number. Their names are entered into the Chinese tax office computer system (and I have had this visibly demonstrated to me) by name and by Passport number, with a code for each country preceding the passport. No consideration is given to the visa status.

Thus, even if you are working "illegally" on a tourist visa or "dubiously" on a business visa, and if taxes are being withheld, then by all means, DEMAND a monthly receipt from the tax office. Your resident status is irrelevant to them, but not to the PSB.

Next, again, directly from the tax office, to our kind poster, TW, you must be working in the private sector, because if you are not, then your school has made a mistake.

Whether or not you are working in a provincial or federal government institution, the "travel allowance" and the "airfare reimbursement", as opposed to anything else, are paid on a pass-through basis by the central government directly to the institutions. This pass-through payment occurs at or prior to the beginning of each academic year. According to instructions from the central government, these travel allowance and airfare reimbursements are NOT taxable as they are (a) a pass-through from the federal government and (b) fall under the housing allowance provisions of the tax code for foreign nationals. If you are in the private sector, well, you are unfortunate here.

However, for those of you in the higher income brackets, please note that any money paid as a "housing allowance" is not taxable until it reaches a very high threshold and often this can represent a work-around for those in that bracket.

TW, if you are in the public sector, then go to your tax office and have them call the school. They will. They will pull their tax code books and simply explain it to the school.

[clark.w.griswald]

[tw]

[bendan]

[cj750]

the post between HFG and Bendan is what I have found to be the position of the tax ofc...and a note from the school is not proof....and a pay slip is useless in a inquiry with the tax ofc........they will go on their records..and this year the tax law has changed to incl. the worker as partial responsibility of payin taxes ... insure that your taxes are paid....

now the one point of confusion..if under a certain amount the company can pay a blanket tax which incl. all the foreign staff..that is why for example Beansalk would falsely sign a contract (SAFEA) and file the number so as to fall in the lower tax category....then by charging individuals tax..they can pocket the overage collected from the worker...

[clark.w.griswald]

[HunanForeignGuy]

Bendan,

I am not familiar with Tianjin and cannot speak to the experiences there. On what concrete information are you basing your assumption? Are you personally aware of someone who paid taxes in Tianjin while working illegally and then incurred problems?

And if you read my posting carefully, you would note that I provided a list of cities in which Beijing is striving to have the new changes in the tax set-up implemented across the Board.

Next, an employer's pay slips do not stand in the place of the monthly tax receipt from the tax office nor in place of the yearly tax receipt. CJ is correct in this aspect.

And sorry, Bendan, but tax payment supersedes resident status. I would urge you to check this point with the Tianjin Tax Office.

Next, I will bring your calculation and evaluation of how income tax is paid to the Tax Office tomorrow and see if they concur. Personally, I think not. And I have dealt with them on this issue extensively.

And no, you are wrong again, the threshold has been raised several times actually from RMB 3,500 to the current RMB 4,800.

HFG

[tw]

[cj750]

Before the changes were made of the tax code of china..the orgs were responsible for the collection of taxes..with the advent of personal business the tax code has been changed...now the individual and orgs have a shared responsibility..

If the tax system doesnt exist in the manor that is prescribed by Beijing..then it is likely that you should pay no taxes as they are not being noted or recorded....

the best way is to insure the tax is being paid..and then on a 6 month basis ..request an official record and chopped by the tx ofc....tax collection has been the same in three provinces that I have checked...whither they are in your area..is a guess...and as to another posters tax office accepting the schools receipt as proof of payment..I would imagine that it may be left up to the discretion of the office (if it is for an internal inquiry), but a receipt from the school is not proof.....What Provence and what time frame this took place may yield additional understanding...

what ever the case..if the school is collecting taxes..you should insure that you have a record of all taxes paid ..by receipt of the tax ofc....


If you wait for the school to do it..your will wait til He!! freezes..I got mine by going down to the tax office and requesting one..as a matterr of fact..I didn't even go to the last meeting.. giving my passport and a letter of permission to my girl and she took care of the documentation...even the school may have to have your permission to get a chopped document as to the taxes paid....schools do not issue chopped tax statement from the tax office...they do not have that power...and the tax statement I have seen issued to schools from tax offices...do not have the individuals acct. 9maybe there is another document that I haven't seen)(remember this is what I have experienced from my dealings with Beanstalk last year..and is a major consideration of FTs that seek jobs with Chinese own and operated schools.
In your contract..always insist that monies paid are after taxes....