How to lower China expat income tax burden?

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  • #4513
    Anonymous
    Guest

    As far as i know i can lower my taxable income with a living allowance (housing) and a cost of living allowance (meaning dinners, my bills, taxi rides, super market receipt??? what else?) These amounts will both have to put in my employment contract for or i won’t be able to use this

    What are the max percentages for this based on a gross salary? 30/40/50%

    What about medical insurance – this is a yearly bill – can this be deducted? same for yearly trip home – can the ticket price be deducted? 

    How does this work on monthly bases since these get paid once a year and only a single fapiao?

    What are others on here doing for this?

    The PRC has cracked down on allowances for expats.

    The normal value is about 25% of monthly income now from what I’ve seen.

    This includes housing, food (groceries or restaurants), laundry, domestic travel. 

    Education costs may be a separate issue as are plane tickets home if its part of your contract.

    To claim the monthly tax-free allowance you need to provide fapiaos.

    Employer-paid portions of Medical and Life insurance is fully taxable.

    Also employers portions of SS and or pension plans is now fully taxable by your friendly Uncle CCP 

    For the monthly claims your company must agree to do the work if they done you are pretty much done also.

    I’m starting work for a new Chinese company. I read here that deductions need to be mentioned in the work contract.

    1. How to mention tax deductible benefits on the employment contract (to reduce the amount of income tax paid)? I know that I will have to provide fapiaos to the tax office. Does each separate item like living expenses, flights home etc. need to be mentioned? If so, where can I get a list of what is deductible? 

    2. Does a total amount for all this need to be mentioned in the contract? 

    2. How much social insurance will the company need to pay for me? How much will I need to pay?

    Thanks in advance

    #4794
    Anonymous
    Guest

    As far as i know i can lower my taxable income with a living allowance (housing) and a cost of living allowance (meaning dinners, my bills, taxi rides, super market receipt??? what else?) These amounts will both have to put in my employment contract for or i won’t be able to use this

    What are the max percentages for this based on a gross salary? 30/40/50%

    What about medical insurance – this is a yearly bill – can this be deducted? same for yearly trip home – can the ticket price be deducted? 

    How does this work on monthly bases since these get paid once a year and only a single fapiao?

    What are others on here doing for this?

    The PRC has cracked down on allowances for expats.

    The normal value is about 25% of monthly income now from what I’ve seen.

    This includes housing, food (groceries or restaurants), laundry, domestic travel. 

    Education costs may be a separate issue as are plane tickets home if its part of your contract.

    To claim the monthly tax-free allowance you need to provide fapiaos.

    Employer-paid portions of Medical and Life insurance is fully taxable.

    Also employers portions of SS and or pension plans is now fully taxable by your friendly Uncle CCP 

    For the monthly claims your company must agree to do the work if they done you are pretty much done also.

    I’m starting work for a new Chinese company. I read here that deductions need to be mentioned in the work contract.

    1. How to mention tax deductible benefits on the employment contract (to reduce the amount of income tax paid)? I know that I will have to provide fapiaos to the tax office. Does each separate item like living expenses, flights home etc. need to be mentioned? If so, where can I get a list of what is deductible? 

    2. Does a total amount for all this need to be mentioned in the contract? 

    2. How much social insurance will the company need to pay for me? How much will I need to pay?

    Thanks in advance

    #5480
    Anonymous
    Guest

    Recently I was approached for a job in Beijing. I won’t say who it was from because quite frankly it isn’t worth my time to get into details. At first it looked like a good position. A good salary for Beijing, job description matches everything I want to get experience in and so far no bad English which is usually a good sign.Then one quick search online and I have uncovered a company who deal in shady internships for foreigners and tell them to arrive in China on tourists visas despite the fact they need work visas to legally work in China. The experience brought me back to a job offer in 2019.

    For a lot of people who want to teach in China there is a massive amount of jobs which are going to present themselves as being this experience of a lifetime and to experience China through teaching children at amazing institutions. From reading the advertisements and website pages you would honestly think you had found your calling in life.

    In June 2019 I contacted by a company. I was contacted by a women, her English was atrocious and she could not write in a professional manner.She told me that her company provides jobs for foreigners looking to teach English in Beijing, with most of the schools being kindergartens. What she of course left out was that they were an agency and were not hiring me directly, but simply being an outsourcing company to hire teachers for schools who otherwise cannot find English teachers.

    I decided to ask if i could see the business license of the company. This is a very important step to take when dealing with employers in China. Many companies operate without a business license. This is illegal and can see the owner prosecuted. Asking for the business license is standard question. I got back a swift reply. I did not change anything, it was written exactly like this.

    ‘we have business license, but we cant send it to the individual cuz we are afraid that people will take it to do something which is not good for our company, hope you can understand. all of the information you can go our website to check it all as long as you are over 22 years , bachelor degree then no problem thanks Yvonne’  This was perhaps the biggest red flag.

    A company that does not provide a business license upon demand is hiding something from you. At this stage I had already lost interest in working for them. I knew they were a pyramid scheme, but I really wanted to know just how bad they were.

    I then saw what they were offering. There were two contracts, one with accommodation and one without. Those with a bachelor’s degree were paid 500 yuan more than those without. What stood out from this was that they were bringing people to China on the wrong visa. As of 2013, to gain a Z Visa/Work Visa, you must have a bachelor’s degree. Without it you will not be able to gain a work visa unless there is some special circumstance. This company were bringing people to China on L Visas/Tourist Visas and making them work.

    This is hardly groundbreaking news. A large proportion of English teachers in China are not on Work Visas anyway. The issue is that if you are caught on the wrong visa, at minimum you will be deported and at worst you could see yourself being detained for either a short or long period of time.

    As China growing, more people will come to China, on the contrary ,Chinese government is tightening visa policy for foreign labor force, as a result,,more companies like this would risk not playing by the rules, facilitate people to work in China illegally.

    For most people it can be chalked up to ignorance ,is it the company’s obligation to clarify what type of visa people should be on while working?We come to China with curiosity and passionate, leaving our home and friends behind ,spreading our culture, bridgeing two different people together.we ought to be last ones to be scammed.

    At first I would have taken any job that came my way. After going through almost all job scams in China and not falling for them, I can safely say, go to China when you know you have a job that is secure. The second an employer states that you do not need a Work Visa is the second you should break off contact with them.

    In China, saying you didn’t know you didn’t have the correct visa will not get you out of trouble.I also think jobs from other expats are more reliable.A expats online community website called antaid.com encourages people to introduce jobs to one another, additionally it’s job posts are open to comment ,people had the same job could give you value opinions.

    #5481
    Anonymous
    Guest

    Good to read that you used common sense and did not fall for so many scams. It must be a daily routine especially in the English teaching industry.

    One thing though, a license in China means nothing to me. I have experienced many times that companies borrow those licences to each other to get what they want. At least in the construction industry. Any newcomer to any industry is most likely photo shopping their licenses.

    Only way to stay clear of trouble is to use instincts. If the school is using such a lame ass agency to find them schools, they must be bad.

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