Job Discussion Forums

[babeilou]

My current university taxes the air fare reimbursement. I have worked in several other universities, both private and public in China, and this travel reimbursement has never been taxed. This is not income. Has anyone else had this problem? Can this be taxed or is it only that the Finance Dept. here doesn't know what it is doing (they only began providing air fare this year)?

Also, they have taxed that 2200 rmb travel bonus we get each year.

Does anyone have any good arguments or explanations that I can use with the Finance Dept. to prevent this being taxed?

[The Ever-changing Cleric]

[Raindrops]

My questions are:
Do you have proof that you are in fact paying a "tax" to the Tax Bureau?

Did they give you a Tax Receipt with your name on it?

If not ... well someone has a deep pocket indeed ...

[ymmv]

http://forums.eslcafe.com/job/viewtopic.php?t=69858&highlight=tax

[babeilou]

The proof of taxation is the monthly form we must sign to acknowledge that we have been paid. It lists the salary minus the itemized taxes. Also, in our bank books, it shows the amount deposited after the taxes and it is the same as listed on the form. At the end of the year we do get an invoice stating how much tax we have paid for the year.

Unfortuantely, our FAO handler is weak. When we ask him why this is taxed, he doesn't know and doesn't ask, even though we have asked why. He is a good follower, not a questioner of the system. The finance department just tells him the reimbursement is taxed and he accepts it.

Glad to know that you agree with me that this taxation is unusual and probably not legal. I think The Ever-changing Cleric is correct--the financial department is misinformed about the law. But how can we non-Chinese speaking teachers convince them of their errors?

[Mister Al]

It's not normal for air fare to be taxed I don't think, but it is 'income' and would likely be taxed in UK or USA. The only way you will find out for sure whether someone is pocketing it is by keeping a record of all monies you have been deducted during you term of contract and comparing this with an OFFICIAL invoice from The local Tax Bureau, not an 'invoice' from your employer.

[Jayray]

How can reimbursement be considered income? A reimbursement is a refund.

[Robin53]

In my last job this happened to me. I told the employer I had never heard of this before. They said I had two options. One was to supply the receipt for the airfare, and the other was to accept the money for a one-way airfare minus tax. I took the cash offer. I'm not China-experienced enough to work out how to get a fake airline receipt.

[kev7161]

Yeah, getting a reimbursement is not the same as getting paid for services rendered (aka: salary). Plain and simple, you give the school a receipt or ticket stub or whatever and they give you the total amount of money shown on that receipt. If they are just giving you a cash "bonus" at the end of the term that "could" be used toward airfare if you so choose, then that could well be taxed. My school is very good in not taxing any bonuses, refunds, travel allowances, etc. and providing me with a tax receipt so I can take that to the bank and exchange cash.

[Duboshi]

Another point for negotiation. When I renewed my first contract, I simply deleted everything I didn't like in the contract or reworded many things. The airfare reimbursement got changed to non-taxable bonus of said amount without strings attached, meaning I didn't need to fly anwhere or produce an air ticket. The company I work for and I have never had any major issues or misunderstandings, but when someone tells you, "don't worry, we would never do this or that to you," I would just reply, "then you won't mind it if I change these things, so that there won't be any misunderstandings later." I would also add that I didn't worry about them, but what if someone else took their job. That new person might not be as friendly and helpful as the one I was talking to. You have to remember to give face whenever possible.
Look over your contracts carefully and then use as much imagination as possible to think about what if. Change all ambiguous entries in the contract or delete them. Don't let someone tell, "but in the Chinese contract, it really means this." Reply that in the English contract it should mean this and this, too. A contract is an agreement between two parties. Why would you let only one party dictate their terms?

[wangdaning]

Suppose you did go somewhere (meaning buy a ticket), you would be taxed. That is double tax. Using this might convince them.

If the finance department can't figure out how to get a tax free bonus they should pay the tax up to the point of your reimbursement. If not, as others said, get the tax receipt (meaning an official tax receipt or fapiao). What you sign with your pay is simply an acknowledgement you got paid. An official tax receipt has chops and a description of the service rendered. A yearly tax receipt has your name/address, your employers name/address, your dates of employment, and your total tax paid. At least mine does.

It also has a number that references you. So, if you are good at Chinese or have friends, you could call and check if tax was paid for you in that month. But it should be tax free.

[evaforsure]

sales tax vs. tax on earnings

[Fred Smith]

I never got taxed on any of those items.

"Its called the I want to take your money and put it in my pocket tax..."

very common tax in china.

[China.Pete]

Travel reimbursements, housing allowances and the like are not subject to taxation. Now, the OP's school has taken a conservative position that official receipts must be provided in order to establish that the funds were indeed used for a non-taxable purpose such as airfare. Many schools, the kind you'd like to work for anyway, will just pay you the money no questions asked. This school didn't.

[dragon777]

No, airfare reimburesments or refunds should not be taxed.