I’m trying to be a good citizen or resident or businesswoman or whatever you want to call me.
I figure I use the things that tax money buys. I use the roads and the street lights at night. I use the parks and the heavily subsidized public transportation.
So I figure it’s only right that I ought to pay taxes.
My tax rate really isn’t all that high.
In fact, my accountant’s monthly fee to file my taxes is more than my taxes are most months. And that’s before the accountant plays around with numbers on forms so that I can be billed less.
Point of fact, however, avoiding paying my taxes is significantly easier than paying my taxes.
The first time I needed proof that taxes had been paid, I was still under the limit for minimum monthly income for a foreigner. It took me and my translator d’jour visits to three different offices before I could find anyone who knew anything about providing the proof let alone that I was proving payment in full on a net nothing.
The first time I had an employer who paid me pre-tax instead of after, attempts to find out how to pay my taxes were all but ignored by the government bureaux I talked to. They didn’t exactly say “go away” or “it’s not necessary” because saying that would be wrong. They just looked at me oddly and said things like “why do you want to know?” and “it’s not that important.”
The first time my business had a really large sum of eminently taxable income the tax bureau employee at the counter actually told me she had no idea how to do the paperwork on earnings that weren’t in renminbi and if the client didn’t want a receipt, I really shouldn’t bother.
In the end, I didn’t bother.
I tried to sign up for the easy online tax payment system for issuing tax receipts when clients paid me but it was so complicated and poorly designed that the person in charge of the training class had problems figuring out how to undo the mistake he deliberately made in front of the class with the specific intent of showing us how to undo it.
Disregarding the fact that this was the instructor who teaches the class twice a day every day, if a native speaker of the language is having that kind of trouble with the “easy” system, I don’t need easy I can tolerate going downtown, standing in line, and going to the counter to get my official receipts. And if I did it that way, I also wouldn’t need to buy a dot matrix printer.
I did my tax receipts at the counter twice without any real problem. My foreignness made the employees a little more generous with regards to helping me fill out forms than they might have done for a Chinese person but as long as the forms got filled in correctly, I was happy.
Last Wednesday, I went to do tax receipts for the third time.
And I couldn’t.
I could go into all the details of explaining how the first counter I was at wanted to see a receipt book I’d never been given, how the leader on the fifth floor tried to explain that the easy online payment system was now mandatory for businesses, and how I eventually got special dispensation to be a counter customer despite having a tax license for businesses.
I don’t need to go into all those details.
I just need to explain that as I left the counter, with my taxes still unpaid because I didn’t have the newly-required-since-September-21st photocopy of the contract between me and my client, I snapped at the woman “I’m trying to do what’s right here. I’m trying to pay my taxes. I live in this country and I use public facilities that are paid for with taxes. Clearly, you don’t want me to pay them and would prefer that I go out of my way not to. I will get the contract and come back but, in the future, I will be telling every client of mine that doesn’t absolutely require a tax receipt that I don’t normally issue tax receipts and I don’t pay my taxes because the tax bureau prefers to make not paying taxes easier than paying them.”
She didn’t have an answer for me.
I’ve played this game before, and yes, the stack of stamps and papers seems to fluctuate just as much about the knowledge of what is needed for the process. Kind of reminds me of my failed attempts to submit proof of services rendered to my American insurance company. Nice post!
Ahem. Why are you doing all that work – and not paying taxes – when your local (Chinese) accountant should be doing it for you? You’re running a translation company and it seems that you can’t gtet it across that you need to file a return? Come on.
You’re wasting your own time, still not in line with the law, and can’t communicate in China is what all this says to me. Stupid x 3.
Did you read the same post as I did? There’s nothing in the tale about having communication problems. The issue is clearly one with broke-down bureaucracy and a reliance on poorly designed technology — which, to state the frustratingly obvious, 5 minutes in China will quickly liberate a person’s unfamiliarity with.
I guess commenting on that isn’t as “savvy” sounding though, and not sounding clever isn’t very guru-like I suppose. But then, neither is calling someone stupid x 3.
The monthly tax report (报表)is the closest thing I can think of that China has to a tax return and it’s not very close since the government won’t be returning any money to me.
My accountant is responsible for doing those. My accountant is not responsible for doing my tax receipts
(å‘票).
I’m the company’s legal representative (法定代表人)and as legal representative tax receipts are one of the things that’s my job.
If I want my accountant to buy my tax receipts I have to give her my financial chop ï¼ˆè´¢åŠ¡ä¸“ç”¨ç« ï¼‰, my company chop (å…¬ç« ï¼‰, my passport, the official copy of my business license (è¥ä¸šæ‰§ç…§å‰¯æœ¬ï¼‰, and the official copy of my tax license (税务登记è¯å‰¯æœ¬ï¼‰ to take to the tax bureau for me.
Not only am I not that trusting with things like my passport, I’m that much less trusting when it’s my passport in combination with everything that is required for taking money out of my company’s bank account.
Obviously, most medium sized Chinese companies in Hainan are moving over to the simple (their words not mine) online tax receipt system. Hand written receipt books are still available but they are almost impossible to get (four visits to the tax bureau before anyone even admitted hand written receipt books still exist).
Counter business, like what I’m doing, is supposed to be for people who are getting a one-off tax receipt on something like rent or a private purchase of a large ticket item to a person/company that demands a tax receipt.
Whether I buy it at the counter or issue it using the simple (ha!) online system, I pay about 5% face value of the tax receipt. Receipts purchased at the counter have my company name, my client’s company name, the services provided, and the sum printed on it. I get two copies of the receipt (one for the client, one for my accountant).
Up to a point, any income for which a tax receipt has not been issued is income which does not exist and which cannot be taxed. (That point being political activism and/or doing things the government doesn’t like. Then the line between income which officially didn’t exist and income which actually didn’t exist is a blurry one.)
If my official earnings (anything I issued a receipt for) are higher than my official expenditures (anything I received a receipt for) I pay an additional 22.5% tax on the difference which is why Chinese companies don’t want to give out tax receipts and why a lot of people in China scrupulously collect them.
The whole thing is clear as mud but one can visualize how it evolved to be like this and how difficult it would be to undo it and replace it with a more efficient system.
-M
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The reason the Chinese woman behind the counter did not have an answer for you Marian is precisely how Chinese deal with overbearing, rude, loud, obnoxious, know-it-all expats=The Silent Treatment
This post did nothing to enlighten readers. It was once again a personal rant about how the Chinese are so stupid and the foreigners are sooo smart.
I fully agree with Tax Guru that you are wasting time; reading the article was a waste of time.
Elizabeth,
Where in the post did she do anything that was inappropriate or obnoxious? If anything, it appeared that she went OUT OF HER WAY to do things the proper way. Or perhaps you’re upset that a foreigner is upset at something in China? If you’re going to be throwing insults, back it up with some facts and quotes please.
Her entire post reeked of “foreign superiority and entitlement” and her final parting shot at the hapless Chinese woman behind the counter was typically boorish and unprofessional to say the least.
I doubt she will get much help from that person in the future and suspect this treatment was due in large part to Marian’s behaviour on previous visits.
For the record, I successfully paid my taxes at the same counter three days later. Then, when the client discovered a typo on the receipt and couriered it back to me to be redone the woman at the counter let me write a handwritten note to the effect that “丹禔 had been incorrectly entered into the computer as “凡禔 and I needed to exchange my receipt for a new one.
For all the many headaches and problems I’ve encountered throughout the process of first registering a WFOE and now owning one, I have to say I’m extremely grateful for the counter staff at the various government offices as they have bent over backwards to help me out again and again.
I’d never get treated like this in the US.
I’ve seen how the same officials treat Chinese citizens, and it’s good to be a laowai.
Thanks for posting Marian. Sounds like an interesting ordeal. It’s good to know more about the tax system for foreigners. I hope I’m not overpaying my taxes or not, but I can’t tell. My boss was really confused about paying my taxes. If you know of any resources let me know (Chinese or English websites, etc).
It’s too bad Elizabeth and Tax Guru got so offended by your post. Why does it have to come down to discrimination between Chinese and foreigners? Let’s not even get into shouting, that happens everywhere in China (wet markets, Walmart, restaurants, on the streets, I’ve seen plenty of shouting), but it also happens in other countries. At the end, let’s just try remain peaceful, assertive if you want and speak your mind, but shouting isn’t necessary.
It shouldn’t be about who is better, this article is just about how difficult it was to pay taxes. It’s a fact that Marian discovered. Honestly, I have to agree as I just got my Work Visa, and I went through some 10-step process, including ” leave the country.”
I still don’t know how to pay taxes for a foreign employee. I finally broke down and did something I said I would never do until I already knew exactly what was being done. I hired an accountant to do it for me.
She’d been taking care of a WFOE run by a non-Chinese speaking foreigner for a while. That boss is a good friend of mine and he hasn’t had any problems with her. At least I can look over what she’s done. He never could.
Every couple of months she just tells me how much money I owe her including the taxes she’s already paid for me. I’m not at all comfortable with this situation but I tried and tried and tried to understand how things were done without any success.
Keep your fingers crossed that my new accountant will be as honest with me as she seems to have been with her other foreign client.
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As a former tax consultant in the U.S. who thought our system stunk… all I can say is wow! I feel your pain (I think) and I am sorry for your troubles! Hope it gets a bit simpler over there, if possible.
It got a little better once I upgraded to the receipt books and now to the ‘simple’ computerized system.
Mostly, it’s better because I pay other people to do it for me. It’s still a clusterfuck.