FINANCE - Living Abroad in Beijing - page 310

Reducing Your Tax
Many companies can help you reduce your tax by having you submit receipts of various
expenses, such as restaurants, groceries, or airline tickets. To do this you will need to ask
for a f ā piào when you pay. The waiter or salesperson should then ask if you want a personal
f ā piào ( gèrén f ā piào ) or a company f ā piào ( g ō ngs ī f ā piào ). In most cases you'll need to tell
them it's a company f ā piào, and you can hand them a business card with your company's
details on it for them to use on the f ā piào .
A larger expense that has the potential to reduce your tax substantially is your rent. If
your company is willing to claim your rent as part of your income—even though you may
be paying the rent yourself—then you can effectively reduce your taxable income. It's a
little complicated to do this, but it can definitely work out to be worth the effort.
If your company is willing to make the necessary adjustments, you will also need to
make sure your landlord is willing to help you get receipts for your rent (a lot of landlords
would rather their rental business remain under the table). It's best to get this sorted right
at the start when you're negotiating your lease. The f ā piào will incur a 5 percent tax fee.
Some landlords increase the rent to cover this, some tenants take on the cost—it's up to
your powers of negotiation. Best case scenario is that your nice landlord does this all for
you and hands you the f ā piào after each payment of rent, and you hand this to your com-
pany. If it's up to you, there are several documents to prepare. You need your passport, a
photocopy of your landlord's sh ē nfènzhèng (ID card), a copy of your lease, a copy of the
deed ( 房权证 ), and a completed invoice application form ( 北京市地方税务局代开发票
申请表 ). This can be downloaded from the Internet. With these in hand, together with a
payment of 5 percent of the lease, head to your nearest Beijing Local Taxation Bureau of-
fice ( www.tax861.gov.cn ). At this point it's relatively straightforward. They'll give you the
f ā piào, which you then give your company so they can prove you have a lower level of in-
come.
If you are planning to be here as a foreign invested enterprise (FIE), you will then also
need to be on top of the laws regarding corporate income tax, value-added tax, withholding
tax, business tax, consumption tax, and individual income tax.
The financial tax year runs from January 1 to December 31, and as an FIE you are re-
quired to file your tax and make payments on a quarterly basis. Business tax, VAT, and
individual income tax returns are also filed on a monthly basis. This must all be done in
Chinese, the legal language, but English may accompany it.
To ensure you are compliant with tax laws, there are many companies specializing in
Chinese tax laws and payroll, including GNS CHINA ( www.gnschina.com ) , S.J. Grand