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Q: How can I avoid Chinese income tax?

I have been living/working in China for a Chinese owned manufacturing company.   I am paid in RMB by direct to deposit to my ABC account.   The company taxes 35% income tax from my salary.  Is there any way around this or to make it less or recoverable at the end of the year?   

2 years 42 weeks ago in  Money & Banking - Ningbo

 
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Take your passport to the tax office nearest your place of employment and ask for a receipt (to see if, indeed, the full amount deducted is going to the tax office). There are several websites that have Chinese income tax calculators as well.

 

Please don't ask about dodging the system or for illegal advice...it makes us all look bad.

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2 years 42 weeks ago
 
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Posts: 1891

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Take your passport to the tax office nearest your place of employment and ask for a receipt (to see if, indeed, the full amount deducted is going to the tax office). There are several websites that have Chinese income tax calculators as well.

 

Please don't ask about dodging the system or for illegal advice...it makes us all look bad.

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2 years 42 weeks ago
 
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Brace yourself.

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2 years 42 weeks ago
 
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35% is way too much, definitely check the tax bureau as suggested and find out how much your company is keeping from your paycheck. 

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2 years 42 weeks ago
 
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Chinese income tax calculator:

 

http://www.sjgrand.cn/individual-income-tax-calculator

 

it opened the other day without VPN...now won't open. But lists the tax bands and calculates your tax if you can open it. 

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2 years 42 weeks ago
 
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If you're paying 35% tax then you should be earning 55000-80000/ month!

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2 years 42 weeks ago
 
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35% of your income goes to paying the Chinese government taxes?

 

What?!

 

That's insane dude... you need to talk to your embassy or something.

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2 years 42 weeks ago
 
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How can I avoid Chinese income tax?

 

Easy - quit your job! Once you don't earn any income, you'll no longer have to pay income tax!!

 

Oh... so you do want some money? In that case, beg plead and grovel to have your pay reduced to about 4800RMb/month!

 

 

Sheesh - that was a no-brainer!

 

Glad I could help... Smile

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2 years 42 weeks ago
 
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INCOME TAX FOR FOREIGNERS IN CHINA
外国人在中国所得税(英文版)

Taxable Income = ( Total Income – Initial Deduction* – Tax Deductible Allowance** )
Tax Payable = ( Taxable Income x Tax Rate ) – Deduction

* Initial deduction is RMB 3,500 for PRC residents and 4,800 for foreigners.
** Tax Deductible Allowance includes rental, food and travel expenses, etc. as determined by your company’s Finance/HR department. You will need to get fapiao (发票) (official invoices) for these figures to qualify as your Tax Deductible Allowance.

Tax Examples
Example 1: Gross Salary of 10K RMB/month
Gross Salary = 10,000
Taxable Income = 10,000 – 4,800 = 5,200
Tax Rate = 20%
Deduction = 555
Tax = 5,200 * .2 –555 = 485 RMB

Example 2: Gross Salary of 10K RMB/month, Tax Deductible Allowance of 2,000 RMB/month
Gross Salary = 10,000
Tax Deductible Allowance = 2,000
Taxable Income = 10,000 – 4,800 – 2,000 = 3,200
Tax Rate = 10%
Deduction = 105
Tax = 3,200 * .1 –105 = 215 RMB

Example 3: Gross Salary of 30K RMB/month
Gross Salary = 30,000
Taxable Income = 30,000 – 4,800 = 25,200
Tax Rate = 25%
Deduction = 1,005
Tax = 25,200 * .25 –1,005 = 5,295 RMB

Example 4: Gross Salary of 30K RMB/month, Tax Deductible Allowance of 15K
Salary = 30,000
Tax Reimbursable Expenses = 15,000
Taxable Income = 30,000 – 4,800 –15,000 = 10,200
Tax Rate = 25%
Deduction = 1,005
Tax = 10,200 * .25 – 1,005 = 1,545 RMB

Naturally, the more your tax deductible allowance, the lower your taxable income and the lesser taxes you pay. So be sure you work out your sums thoroughly before negotiating your next raise or paycheck!

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2 years 42 weeks ago
 
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