[adahc]

Please can anyone understand this? I got a job offer (obviously not as an accountant or in banking!!!) and for the life of me can not understand this type of offer.

The gross annual salary of RMB 600000 will lead to difference net amount with tax exemption policy

1, if you can provide meal/food fapiao equal to 20% of your month salary and rental fapiao equal to 30% of your month salary, you will get net amount of RMB 560000 as I attached in spreadsheets. Your home flight (twice a year) also can be used for tax exemption which make your net amount more.
2, If you provide zero fapiao, you will get net amount of RMB 487000.

How much do we need to spend on housing and food roughly in the first condition?????

How much is the tax in China?

[leghk]

this is just a guess ( i am not an accountant either)

Gross monthly salary = 50,000

Food = 20% = 10,000RMB
Rental = 30% = 15,000RMB

Taxable salary = 300,000RMB per annum.

Tax = 40,000RMB per annum

Tax = just over 13% (6.5% of gross)

[aegirkyo]

Originally Posted by adahc

Please can anyone understand this? I got a job offer (obviously not as an accountant or in banking!!!) and for the life of me can not understand this type of offer.

The gross annual salary of RMB 600000 will lead to difference net amount with tax exemption policy

1, if you can provide meal/food fapiao equal to 20% of your month salary and rental fapiao equal to 30% of your month salary, you will get net amount of RMB 560000 as I attached in spreadsheets. Your home flight (twice a year) also can be used for tax exemption which make your net amount more.
2, If you provide zero fapiao, you will get net amount of RMB 487000.

How much do we need to spend on housing and food roughly in the first condition?????

How much is the tax in China?

The key word is fapiao (invoice). if you can provide the evidence of consumption on meals and rent, you will get 560K. Remember the restaurants don't offer an invoice unless you ask for one.

the tax in china is heavier and more complicated than in HK. you shall pay no less than 20% in your case. that's why the company keeps asking you to provide fapiao(invoices). they can somehow reduce your salary and make the net amount look nicer.

[adahc]

the tax in china is heavier and more complicated than in HK. you shall pay no less than 20% in your case. that's why the company keeps asking you to provide fapiao(invoices).

I thought the tax in China is around 13% no?

they can somehow reduce your salary and make the net amount look nicer.

What do you mean they reduce my salary and make the net amount look nice?

Sorry number is not my strong point!

[MovingIn07]

i think what the poster meant is that if the company pays these things out of your salary, rather than giving you the money, then you pay less tax and get to keep more money. It's called salary sacrifice in Australia, but I could be wrong!

[mjk]

There are a few threads about this on a similar Shanghai forum.
My understanding on this matter is that you can reduce your taxable income by providing official receipts for rental, flights, entertainment. This is common among expats in China, but your company must agree to this procedure as it involves some paperwork for them as well.

Generally the tax in China is not 13%, but up to 45%, depending on your income. For example if your salary is 50K per month without tax deductions you pay 30% tax.

Click your way through the Shanghai forum or start at pages such as this one: China Tax Laws Tax System China. - WorldWide-Tax.com