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IIT tax in shanghai

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ORIGINAL POST
Posted by sonja 16 yrs ago
think about take a position in Shanghai. How is the tax rules situation?


I know it would be 5 - 45%. But, what would be considered as reasonalbe to be deducted before the calculation? Rental up to $xxxxx? School fee of the kids? Anything else? or ? Is there any legally tricks?


Thanks for any information

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COMMENTS
Oski 16 yrs ago
Not an expert on Chinese personal tax laws, but at a quick glance, it seems the rules are relatively simple. Almost no deductibles. However, I know many people working for multinationals get majority of their pay in Hong Kong, even though the job is in China. They usually get a minimal pay in China, typically just CNY 5k/mo, and receive the rest in HK.

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sonja 16 yrs ago
I do not really think it is possible. A foreigner with 5k/m in china seems very suspecious for me. I do heard about that you can let the company pay the rental and school and save the tax of that part income. But would prefer to hear some expierenced one to confirm it. Thanks for your input anyway.


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Oski 16 yrs ago
If your company can help you setup your job this way, then the goal is to receive as little pay in SH as possible. You can transfer money from HK to pay for your living expenses. Of course, get your employer to pay for as much of your expenses as possible.

BTW: you'd be surprised how many foreigner in SH are getting less than 5k/mo. Almost all the NET English teachers in Chinese universities are paid 4k/mo standard salary. They are so poor, on nights out they need their students to pay for their drinks. There are also many no income foreigners living in SH for the lifestyle. In many cases their company assignments have ended years ago. They get some friend's company to issue fake employment letters to get visas, and live off their (often rather small) savings. Unlike HK, one can still live rather cheaply in SH.

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sonja 16 yrs ago
The reality is shocking, isn't it? But I am talking about a GM position in the industry which means the tax will be definitely doubled compare to Hong Kong. :(


So you mean it is legal to have the salary partly paid in Hong Kong and pay that part of tax in Hong Kong. I always thought Chinese government insists that all incomes you get for your position in China are taxable in China. BTW, how is it, when the SH company has no office in Hong Kong?


Thanks

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Oski 16 yrs ago
Well, if your husband's company has no HK presence, then it would be very difficult to structure the job package with HK hr relationship. But then, since he is general manager, maybe it is in his power to open an HK office and employ himself in HK, and then assign himself to SH office. However, he would need to make a business case to open an HK office.

You can elect to receive part of your pay in home country. Most companies will allow that. However, if you are from a high tax country there may not be any savings.

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