Job Discussion Forums

[mattyko40]

So, my present job offer is x amount "in hand". I thought this meant after taxes, but it means I have the option to pay either Chinese or USA taxes. I thought Chinese taxes were mandatory and that businesses could be fined for this. This organization has 10 schools and seems decent, but am I asking for trouble here? I will get a z visa. I only have 1 year xp in China at a college, so I don't know much about how this works. I want this job because it is the only opportunity I have for teaching Economics. I do not want to teach another year of ESL. I have checked for this topic before and will delete if someone can share a link to an already posted topic.

[jimpellow]

Yes, fishy is this. If I read this correctly, it sounds like you are American and they have a US corporate presence and are going to pay net into an account there.

But that would denote that you were working here in an exchange or business capacity. For a year long contract as a teacher that would be the wrong visa, hence illegal.

They may have found a way to rig the system - they being the Chinese are masters at it. But to come here on a Z and then avoid paying taxes is something the Chinese government (or any government) is going to take kindly too.

Saying that this option does exist at least theoretically, I would think that the reason that they are doing it is the new social tax. This has placed up to a 40% overhead on employers which is substantial. I know payroll taxes in the US do not come close to that for employers.

If they did pay into a US account, I don't think you would lose your overseas earnings tax exemption, but it might trigger a flag to the IRS to at least question it.

The frenemies of China and America are quite friendly when it comes to sharing tax information.

Would you be paying federal taxes too? How could you pay this if you had a valid physical presence outside the US for more than 335(?) days in a tax year? Perhaps refunded. Hmm..questions abound. Maybe someone here has gone through this.

[mattyko40]

I do not believe they have any American presence. They have an American director, but the owners are Chinese.

It would actually be a two year contract. They would pay for me to get Edexcel certified and a-level cert.

They are up front about it in a way, but then it sounds ...illegal. Right? The way he said it was "I had the option of what tax to pay and if I want they will take out Chinese tax".

If they don't pay taxes and I get caught is it just a fine? Back taxes?

[OhBudPowellWhereArtThou]

Unless you make over $97,000.00 per year (or thereabout) you merely report your income to the IRS. There's a form for this. You don't pay Federal taxes on income below that amount, but you ARE required to pay into Medicaid. Check your own state's laws regarding state taxes.

Your Chinese employer should deduct taxes from your pay. Public institutions skirt this when they can, and this could have serious implications for you, the most annoying of which is that you won't be able to convert your Chinese cash to USD. (Yes, I know that there are those who have never paid any taxes to the Chinese government but manage to convert money anyway. Don't count on being one of those people. You'll need help converting currency. Any Chinese citizen may help you).

Regarding payment of taxes: your employer should at least tell you how to go about doing this. He may not want to help you in this area because he may have other things that he's hiding from the tax man. Your best bet may be to get a Chinese friend or two to help you convert your cash and say nothing.

If you're making less than $10,000 USD per year and intend to bring all it home, it may be a huge hassle for you to even report your earnings if you have no documentation to prove your income. Your employer can help you transfer money home if your cash amount is over the limit allowed into the country without declaring it at customs (or wherever you're supposed to report it when you return home).

I'd be more concerned about converting the currency and sending it home than reporting anything to the tax man.

[jimpellow]

I think you really need to keep pressing them on this and just be frank that it is causing you just concern. Not enough details for this baffling situation to expect weenies like myself to give you wrong advice.

[mattyko40]

The school says there is no social insurance for foreigners. Is that true? I have read a few different articles now that state it is up to the local govt. The city is Hefei.

It is a new school, so they wanted me to come over on a l,m visa. They only stated this, after I questioned the language in the offer letter they want me to sign. Now they say I can wait to get a legal z visa and that they can apply for a z visa a month after school starts. Is that even true? I read elsewhere it takes a school 13 months to be able to acquire a z visa.

It would be a good opportunity to gain valuable certifications(A-level), but they seem to be showing a pattern here. The American in charge of the academic side seems great, but the Chinese guy is... well Chinese! Also, the school does not have any bad reviews. It's been around for 10 years with other locations.

In conclusion, are foreigners forced to pay Chinese taxes? Is there social insurance retirement for foreigners? Does it take 1 month for a new school to be able to apply for z visas? If anyone has links to relevant information it would be appreciated. Thank you for the help!

[wangdaning]

Yes, like most places, income earned here is taxed here. They are blowing smoke on that one, and it could get you in trouble. As far as social insurance, you are right in that it varies by location, so I have no first hand knowledge of that area and cannot give any feedback. I know I pay something into it, but that is here in Chengdu. For the visa thing, I also have no clue. Good luck.

[jimpellow]

2 + 2 = 4. Good that you did your due diligence, time to move on...