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Q: Tax for expats in China
Does anyone where I can find out about paying tax in China and what is taxable. Sounds like an odd questiion, who the hell wants to pay tax? I don't but I would like to stay legal I understand that I do net need to pay income tax until I have been here five years, well the first year has just flown by so I guess the other four won't take too long. I have money in Jersey, would I pay tax on the interest earned or only if I remit to China. Any other pointers would be welcome.
12 years 6 weeks ago in Money & Banking - China
u r on Z visa?... if yes the tax is same as for chinese.. % based on documented salary..
tomcatflyer:
No I am on an ordinary visitors visa, although it is for 12 months at a time. I do not work here, although I do have three students who I teach conversational English to privately. Does it make a difference?
ExPats in China are now subject to two different types of taxes, one is on income, and another is like the Social Security as in the USA.
On income, you have still 4 years without worries, but if interested you check out the following web page
http://www.worldwide-tax.com/china/china_tax.asp
Please notice that while the tax brackets and rates are the same as the Chinese, ExPats are allowed to deduct 4800 Rmb from the monthly income, while Chinese only 4,000, so it is not exactly the same.
Most of the ExcPats paying taxes are those working or in business here.
And for information on Social Security Taxation after july of 2011, please go to
http://www.mondaq.com/x/136682/Expatriate+Social+Insurance+in+China+What+Happens+After
+1+July+2011
HappyExPat:
If you reside in China for less than 5 years, you pay taxes only on income from China sources. But once you have been here for more than 5 years, you must pay Chinese taxes on income from ALL sources, Chinese or abroad. For USA residents that will mean that "in theory" even your SS benefits will pay Chinese taxes after 5 years in China, just as investments, interest income, etc from abroad.
What HappyExpat posted is true. If you run a business and are licensed expect a 20 to 28% tax on the value of your establishment, 5% of you income.
If you are working then you will pay from 6 to 20% deoending on how your employeer plays the game.
The new Medi. tax is to try and provide government insurance to all Chinese citizens who cannot afford average health insurance. I don't think this will help though. And it's not much.
Overall, it depends on who you work for or what business you run. If you know the right people, there are many ways around the tax system that is redundent to say the least.
My employeer pays my taxes but is deducted from my salary and I pay taxes on my business, feels like America all over again. The more I make the more they take
I think it depends on what country you come from. Australia has a tax reciprocal tax arrangement with China so I pay the same tax rate as if I was living in Australia. 40%. OUCH, but if I am entitled to a tax refund the Australian Tax office will refund me. Although I have been working in China for 2 years and have a Chinese Foreign work permit (little red book ) I'm still regarded as a Australian resident for tax purposes although I pay Chinese tax ???, you can't beat the Aussie Tax man.
Shining_brow:
Last time I tried to put in my return in Bris, I went to ITP - they completely ignored my Chinese income... and I mean ignored... so, obviously, it's not so cut and dried!
But, then, if it's the same tax rates as we should be getting back home, when are we going to earn the equivalent of about $40K in AUD for the higher rates??? If it was that simple, I'd be getting almost everything back!
Interesting, I'm having my 2010/11 tax done now and I can only repeat what the tax accountant is doing. All I know is the tax I pay here is called a Foreign Tax credit and is assesable in Australia. I think you'll have too earn more than $40k to pay 40% tax. I'm employed through a Australian company so they pay Australian wage rates, can't help that.
I would question ITP about your tax, you maybe entitled to a refund, I know quiet a few people that I work with that are getting tax back.
