my burning question on china

ikemen · Oct 29, 2008

hello folks,

i got a colleague who's gonna go work in china as an expat sometime next month, and he just told me one of the most ridiculous thing i've ever heard

can anyone pls tell me it isnt TRUE that every single foreign worker who works in china has to pay the china government freakin' 20% of their salary as tax?

pls enlighten? thanks!

mikej77 · Oct 29, 2008

Not sure how private industry works but the answer is no if you work for the US Gov't and are stationed in China.

Fade to Black · Oct 29, 2008

China is a corrupt, complex and shady place in general, but I don't think it's THAT overt.

Wouldn't be surprised if you had to "grease the wheels" more so than anywhere else to get a deal closed, though...even if working with supposed "organizations of global fame."

VKK3450 · Oct 29, 2008

Am I missing something? In most countries when you work as an expat you have to pay the government some sort of tax on income (exceptions are Dubai, etc..) If its income tax then 20% sounds pretty decent to me. Whats the issue?

K

DNW · Oct 29, 2008

Originally Posted by VKK3450

Am I missing something? In most countries when you work as an expat you have to pay the government some sort of tax on income (exceptions are Dubai, etc..) If its income tax then 20% sounds pretty decent to me. Whats the issue?

K

+1. There are two certainties in life: death, and taxes. Why are people so surprised when a government taxes someone who is allowed to work in that country?

VKK3450 · Oct 29, 2008

Originally Posted by DarkNWorn

+1. There are two certainties in life: death, and taxes. Why are people so surprised when a government taxes someone who is allowed to work in that country?

And 20% is hella low. When I was working in Amsterdam I was paying around 50% before that **** hit my bank account. Sucks even worse as a foreigner as I wasnt going to reap the benefits. Luckily I became eligible for an expat tax break after a while.

K

Patrician · Oct 29, 2008

Originally Posted by VKK3450

Am I missing something? In most countries when you work as an expat you have to pay the government some sort of tax on income (exceptions are Dubai, etc..) If its income tax then 20% sounds pretty decent to me. Whats the issue?

K
+1

20% income tax is really low in general.

worldwide-tax.com says this about China's taxes:

The tax on an individual's income is progressive. As at 2008, an individual's income is taxed progressively at 5% - 45%.

They also state the following:

An individual's capital gains are taxable in China at the rate of 20%.

Viktri · Oct 29, 2008

20% seems low for an income tax rate in China.

DNW · Oct 29, 2008

Originally Posted by Viktri

20% seems low for an income tax rate in China.

It depends on your income. Obviously, the more you make, the more you pay. Don't forget that this is on top of the domestic income tax that the guy will have to pay (save for the foreign tax credit).

Matt · Oct 30, 2008

ya, but that's America's fault, not China's. The US is the only country I know of where expats still pay domestic tax. Personally I find 20% quite low, wouldnt complain...it's better than Vietnam and way better than Australia.

taxgenius · Oct 30, 2008

What if a Chinese citizen works in the USA, you think he'd pay no tax to the IRS? You think it would only be 20%?

Matt · Oct 30, 2008

Originally Posted by taxgenius69

What if a Chinese citizen works in the USA, you think he'd pay no tax to the IRS? You think it would only be 20%?
is that directed at me? Not sure, as it directly follows my post. If so - no he would pay to the IRS, but he would not also pay taxes to the Chinese government on his salary abroad. To my knowledge, Americans are the only ones double-taxed. And lord knows they complain about it....hell, I would too.

Manton · Oct 30, 2008

I would kill for a 20% tax rate.

Patrician · Oct 30, 2008

Originally Posted by Manton

I would kill for a 20% tax rate.
+1

taxgenius · Oct 30, 2008

Originally Posted by m@T

is that directed at me? Not sure, as it directly follows my post.

Nope. Directed at the OP.

Originally Posted by m@T

If so - no he would pay to the IRS, but he would not also pay taxes to the Chinese government on his salary abroad. To my knowledge, Americans are the only ones double-taxed. And lord knows they complain about it....hell, I would too.

If the two countries have a tax treaty, there will be no double taxation.

The current US tax treaty with China has been in effect since 10/22/86.

The sole purpose is spelled out in the first paragraph of the treaty: The Government of the United States of America and the Government of the People's Republic of China, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income, have agreed as follows...."

my burning question on china

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