| Author |
Message |
lee2008
Newbie
Joined: Jan 21, 2008
Posts: 6
Status: Offline
|
 Posted:
Feb 18, 2008 - 01:12 PM |
 
|
| Post subject: What is the actual tax rate for foreigner ? |
 |
Last edited by lee2008 on Aug 11, 2008 - 07:57 PM; edited 1 time in total |
|
|
|
Dasher
Seeker
Joined: Aug 28, 2007
Posts: 67
Status: Offline
|
| Posted:
Feb 18, 2008 - 02:29 PM |
|
|
|
|
|
andreasguip
Seeker
Joined: Aug 12, 2007
Posts: 47
Status: Offline
|
| Posted:
Feb 18, 2008 - 04:27 PM |
|
|
lee 2008,
My current salary is between 40 and 60K as well. The tax system here is progressive with 30% for this range. Insurances and pension have to be individual done and are seen as salary as well. This means that you will need to add this part on top of you salary. Housing, however is tax free for expats with a fa piao. If your housing allowance is higher than the fa piao, it difference will be added to your taxing income. |
|
|
|
|
|
canuckyyz
Reacher
Joined: Feb 13, 2007
Posts: 247
Location: Canadian living in Shanghai Lujiazui
Status: Offline
|
| Posted:
Feb 18, 2008 - 07:08 PM |
|
|
|
|
|
|
lee2008
Newbie
Joined: Jan 21, 2008
Posts: 6
Status: Offline
|
| Posted:
Feb 19, 2008 - 04:39 AM |
|
|
|
Last edited by lee2008 on Aug 11, 2008 - 08:07 PM; edited 1 time in total |
|
|
|
|
edbreejen
Ranter
Joined: Apr 24, 2003
Posts: 560
Location: Shanghai, Zhongshan park area
Status: Offline
|
| Posted:
Feb 19, 2008 - 10:29 AM |
|
|
Standard monthly deductable is RMB 4.800 for foreigners. For locals RMB 1.600, but will change to RMB 2,000 starting next month.
As said, housing allowance can be deductable, but depends on the set-up with your company. Same applies to transport costs. Besides, there are some small deductable like higher costs made to eat your 'own/special' food and costs of washing representative clothes (sounds odd, even people at the tax bureau did not understand this one). |
|
|
|
|
andreasguip
Seeker
Joined: Aug 12, 2007
Posts: 47
Status: Offline
|
| Posted:
Feb 19, 2008 - 11:25 AM |
|
|
The deductable for foreigner will also change to RMB 5200 by next month |
|
|
|
|
|
alaal
Talker
Joined: Feb 27, 2007
Posts: 80
Location: Bund
Status: Offline
|
| Posted:
Feb 19, 2008 - 12:44 PM |
|
|
is there tax preperation services here in shanghai like the US? I am payed Net but still need to prepare everytihng here so i can coordiante back at home taxes (Uncle Sam always gets you...) I need to make sure my compnay paid the apporiate taxes and what i can confimr back to the US |
|
|
 |
|
andreasguip
Seeker
Joined: Aug 12, 2007
Posts: 47
Status: Offline
|
| Posted:
Feb 19, 2008 - 01:40 PM |
|
|
yes, there is. One of the official preparation offices is China Star Enterprice. Unfortunately I don't know there contact details. Google it! |
|
|
|
|
|
edbreejen
Ranter
Joined: Apr 24, 2003
Posts: 560
Location: Shanghai, Zhongshan park area
Status: Offline
|
| Posted:
Feb 19, 2008 - 03:50 PM |
|
|
| Quote: |
The deductable for foreigner will also change to RMB 5200 by next month
|
Didn't know that yet, good to hear! (impact is tiny, but still good to hear) |
|
|
|
|
|
andreasguip
Seeker
Joined: Aug 12, 2007
Posts: 47
Status: Offline
|
| Posted:
Feb 19, 2008 - 04:43 PM |
|
|
| edbreejen wrote: |
| Quote: |
The deductable for foreigner will also change to RMB 5200 by next month
|
Didn't know that yet, good to hear! (impact is tiny, but still good to hear) |
read it in the shanghai daily end of last year (December) |
|
|
|
|
|
seph_07
Fire-eater
Joined: June 23, 2006
Posts: 2746
|
| Posted:
Feb 19, 2008 - 04:58 PM |
|
|
below RMB5000 salary no tax.
for RMB20000 below, formula would be:
Gross pay - RMB4800 (Free of tax for foreigners) x 20% - 375 = Amount of tax to be paid
for RMB20000 up:
Gross pay - RMB4800 (Free of tax for foreigners) x 25% - 375 = Amount of tax to be paid |
_________________
how many brothers fell victim to the street... |
|
|
|
|
greenmark
Rocker
Joined: July 28, 2005
Posts: 612
Location: Location Location
Status: Offline
|
| Posted:
Feb 19, 2008 - 05:37 PM |
|
|
Lee2008, you really need to check with the company again as to whether or not they allow your fapiao payments to be deducted from your taxable income. From all the people I've spoken with here, this is dependent upon how well your HR can interpret the local tax laws.
One company I know of, for instance, allows up to 40% of gross income (salary + housing allowance) to be offset as deductible from fapiaos. Fapiaos can be collected from housing, food and beverage (beer!), flights home, telephone, language education and children's education - but the total amount for each of those is limited (eg only 70% of the 40% can be food fapiaos, for instance).
Assuming that you have 50k per month, then if you use all 40% in fapiaos then you need to pay tax on 30k. If seph's rates above are correct, then you will be paying
(30k - 4800)*25% - 375 = 5925 per month. So your end tax rate will be 12%.
But, then again, I have friends in companies where the expats are not allowed to deduct any fapiao at all. Check with your HR about what is their arrangement. |
|
|
|
|
|
lee2008
Newbie
Joined: Jan 21, 2008
Posts: 6
Status: Offline
|
| Posted:
Feb 21, 2008 - 04:47 AM |
|
|
|
Last edited by lee2008 on Aug 11, 2008 - 08:08 PM; edited 1 time in total |
|
|
|
|
maneo
LoopKicker
Joined: May 12, 2007
Posts: 857
Location: neither here nor there
Status: Offline
|
| Posted:
Feb 23, 2008 - 01:56 PM |
|
|
Income varied from month to month, but for those months in the same ball park the overall tax rate was ~15-16%.
Actually this was just for the amount paid in CN. Employer used to pay a portion outside China, which helped a lot. Unfortunately, since the "outside" CN destination was HK, policy changed so even that started getting taxed, too.
At least the employer was allowed more reimbursable items for fa piao to keep the total tax bite comparable. |
|
|
|
|
|
veritax
Lurker
Joined: Nov 01, 2005
Posts: 22
Location: Beijing, China
Status: Offline
|
| Posted:
Feb 23, 2008 - 04:32 PM |
|
|
| andreasguip wrote: |
| edbreejen wrote: |
| Quote: |
The deductable for foreigner will also change to RMB 5200 by next month
|
Didn't know that yet, good to hear! (impact is tiny, but still good to hear) |
read it in the shanghai daily end of last year (December) |
Latest update: the tax threshold stays at RMB4,800. http://www.chinadaily.com.cn/bizchina/2008-02/23/content_6478982.htm |
_________________
Practicing Exclusively in US Tax ---- www.ustaxchina.com |
|
|
|
|
yu888
Board Deity
Joined: Jan 25, 2003
Posts: 19335
Location: ZhongShanParkArea SH
|
| Posted:
Feb 24, 2008 - 01:48 AM |
|
|
|
 |
|
maneo
LoopKicker
Joined: May 12, 2007
Posts: 857
Location: neither here nor there
Status: Offline
|
| Posted:
Feb 24, 2008 - 09:44 AM |
|
| Post subject: Re: What is the actual tax rate for foreigner ? |
| lee2008 wrote: |
Hi,
I have been offered a job in Shanghai, my income is between the 40k to 60k bracket, so it is 30% tax ? But I was told that it is 22% because I am a foreigner. Is this true ?
I was negotiating base on the take home pay but when they make the offer, they quoted me the gross salary.
Besides that I have a pension and housing allowance. What is MCA in a payroll ? Is this taxable ?
I am told that I will require a Fa Piao for my rental. Any unused portion of the housing allowance I will have to pay tax. If this is added to my base salary and bring my tax bracket to over the 60k bracket then I will be taxed 35% ?
Thanks |
Don't know if clarification is needed, but here goes anyway.
Like in the US, the tax bracket rate applies only to the incremental amount above the minimum for that bracket.
Don't be confused by bracket rate and overall "average" tax rate. The "22%" rate you mentioned above must be an average rate (for your income). With fa piao this could be even lower.
Last I checked, there were 9 brackets in 5% increments up to 45%.
There is no "22%" bracket.
If you are getting just over 40K, yes, you will be in the 30% bracket and the average rate will be at least 22% of the total taxable amount.
So, try to get more things in the non-taxable category so that your "average" based on total received drops (hope this is not too much math for you). |
|
|
|
|
|
loowk
Talker
Joined: Sep 14, 2006
Posts: 107
|
| Posted:
Feb 24, 2008 - 06:31 PM |
|
|
|
|
|
|
Ikbal
Reacher
Joined: May 27, 2007
Posts: 201
Location: Shanghai
|
| Posted:
Feb 28, 2008 - 08:09 AM |
|
|
| andreasguip wrote: |
read it in the shanghai daily end of last year (December) |
I did not know about it either. Do you have a link to the article? |
|
|
|
|
|
Rais
Reacher
Joined: Nov 17, 2006
Posts: 298
Status: Offline
|
| Posted:
Feb 28, 2008 - 08:49 AM |
|
|
Is there any official site in Chinese, listing the allowed deductibles? |
|
|
|
|
|
maneo
LoopKicker
Joined: May 12, 2007
Posts: 857
Location: neither here nor there
Status: Offline
|
| Posted:
Feb 29, 2008 - 06:48 AM |
|
|
|
|
|
|
andreasguip
Seeker
Joined: Aug 12, 2007
Posts: 47
Status: Offline
|
| Posted:
Feb 29, 2008 - 09:01 AM |
|
|
| Ikbal wrote: |
| andreasguip wrote: |
read it in the shanghai daily end of last year (December) |
I did not know about it either. Do you have a link to the article? |
Veritax posted an article about that the rate is staying at RMB 4800. Things happen in China, one time yes, the other day no..... |
|
|
|
|
|
|
|
Forum FAQ
Search
Preferences
Watched Topics
Log in to check your private messages
Log in
