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bobl4198
Newbie
Joined: Dec 10, 2007
Posts: 6
Status: Offline
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 Posted:
Dec 10, 2007 - 09:46 AM |
 
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| Post subject: New China Banking Law? |
I'm in some last rounds of neg. with a major company on a 4 year contract and on the last go around they put in a clause that I will be paid in China and it needs to be into a China bank. I cried foul over possible tax issues or fee issues. When or if I take or transfer money out of my China account into US account (which I will need to do monthly and probally eventually the balence someday) will I incur fees or possible tax issues.
The company told me there is a new law and "I won't be subject to additional taxation". I don't necessarilly trust this information.  I'm afraid that the fees will be very high and I should make an agreement provision to cover these costs. If any? |
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Missin
Reacher
Joined: June 22, 2007
Posts: 245
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Dec 10, 2007 - 01:18 PM |
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To transfer funds out of China, I don't believe you'll be taxed. Fees are a different story and it'll depend on which bank you use. Bank of China, expect at least 150-200RMB per transfer. If you're paid in USD, expect the fees to be higher. Reason being (at least with BoC) they'll need to convert the USD to RMB (7.3181 as of today) first to process the TT, then they'll convert it back to USD (7.4068) so that it can be deposited into your US bank account. You'll lose out on the conversion.
As for the US, as long as you're salary is less than $81-85k (not sure what it is now), you won't be subject to any additional taxes. Anything above this threshhold you'll need to pay tax on. |
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bobl4198
Newbie
Joined: Dec 10, 2007
Posts: 6
Status: Offline
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Dec 10, 2007 - 08:47 PM |
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Thanks for the information Missin" The package is split up between USD and RMB. The majority naturally being USD. Its just at the last minute they put in this stipulation that pay will be deposited into a China bank that made me think. Looks like they are trying to avoid the US transfer fees and conversion loss.  |
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Missin
Reacher
Joined: June 22, 2007
Posts: 245
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Dec 10, 2007 - 09:09 PM |
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Your welcome! If you're still negotiating, see if they'll reimburse you on the transfer costs. After each transfer just bring them the receipt(s) for the reimbursment. 
Oh, one more thing if you're using BoC. I've transferred USD to my bank account in the US 3 or 4 times. Each time BoC will use their US branch as an intermediatary bank to process the TT to my US bank...and each time the BoC-US deducted an additional USD$15 commission fee on top of the fees I paid in China, and the fees my US bank charges. This is only from my personal experience, not sure if anyone else have been charged by BoC-US the same way (which I suspect they should, but you never know). |
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bobl4198
Newbie
Joined: Dec 10, 2007
Posts: 6
Status: Offline
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Dec 10, 2007 - 09:36 PM |
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Wonder if it would help id I opened an account here in the US with Bank of China? Its so annoying that a major company fixing to hire a senior manager will play this nickel and dime game. Thanks again for the info! |
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yu888
Board Deity
Joined: Jan 25, 2003
Posts: 18044
Location: ZhongShanParkArea SH
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Dec 11, 2007 - 12:09 PM |
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Bank of China in the US is ALSO a seperate bank than Bank of China here. The reason they probably want to pay you in China is likely b/c they are now getting required to account for your income as a China-based expense. If your company is only doing it to avoid transfer fees, not sure i'd want to work for them. But seriously, you will have CHina-based expenses as well as US based ones, and given the trend of the USD going down against the RMB, its not that bad a deal for you. I have been getting paid "more" every month this year b/c of my RMB compensation. |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9907
Location: EOA Seminar
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| Posted:
Dec 11, 2007 - 07:15 PM |
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| Post subject: Re: New China Banking Law? |
| bobl4198 wrote: |
I'm in some last rounds of neg. with a major company on a 4 year contract and on the last go around they put in a clause that I will be paid in China and it needs to be into a China bank. I cried foul over possible tax issues or fee issues. When or if I take or transfer money out of my China account into US account (which I will need to do monthly and probally eventually the balence someday) will I incur fees or possible tax issues.
The company told me there is a new law and "I won't be subject to additional taxation". I don't necessarilly trust this information. I'm afraid that the fees will be very high and I should make an agreement provision to cover these costs. If any? |
No tax issues. No matter where they pay you, you are subject to Chinese income tax.
Get an account at HSBC. Using their online banking, you can easily transfer your money for FREE into any other HSBC account in the world as long as both accounts are under the same name. |
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