I'm new to China and I have a tax/deductions question...

October 23, 2012 7:02 AM

I'm new to China and I have been told by my employer that I can only deduct laundry and restaurant bills from my income tax. that sucks since I was planning to purchase a lot of photography/computer gear that's relevant to my job. is there really no way for me to get a tax deduction on these items?
posted by krautland to work & money (9 answers total)

Which country's taxes are you talking about? Chinese, or US? (I'm assuming US here because it's one of the few countries that requires expats to pay taxes.)
posted by Tomorrowful at 7:07 AM on October 23, 2012

no, China. I am in Shanghai and this is not about US taxes.
posted by krautland at 7:09 AM on October 23, 2012

I'd be really surprised if you got an actual authoritative answer on the fine points of CHINESE TAX LAW on this website. I mean, we have a huge number of people from a vast swath of the planet logging in here but there are limits.
Based on how much tax money I save in the US by deducting my business gear on my taxes, I have to say that unless tax accountants are somehow nonexistent or outlandishly expensive in China, it's really worth your while to pose this question to a Chinese Tax expert.
posted by BigLankyBastard at 10:13 AM on October 23, 2012 [2 favorites]

I'd be really surprised if you got an actual authoritative answer on the fine points of CHINESE TAX LAW on this website.

Agreed. No one here is your Chinese tax lawyer.
posted by Dasein at 10:41 AM on October 23, 2012 [4 favorites]

My knowledge is a few years old and based on having lived there for a few years rather than being a Chinese tax lawyer, but there are certain categories that are allowed for foreign employees to deduct, and I don't think equipment counts. The deductions are mostly for expat quality of living expenses: transportation (taxis), rent, schooling expenses (for your children), restaurants, etc.

At any rate, when I needed to collect fapiao (the official receipts) for my income tax deductions, you can tell all of your friends to help you collect fapiao for laundry and restaurant bills. It's very common. You may also be able to deduct rent--at least I was able to as a foreign employee a few years ago. I'm not sure if things have changed though.
posted by so much modern time at 4:40 PM on October 23, 2012

Backing up what so much modern time says: as a foreign employee, what your employer thinks of when you say "tax deduction" are the standard expat quality of life deductions. You need to be more specific about the purpose of the equipment, and possibly work out something with your employer where you might "sell" him the fapiao.
posted by msittig at 5:50 PM on October 23, 2012

yepp on rent deduction and laundry/restaurant fa piao. I even won the fa piao lottery already.

selling the fa piao is interesting. I will investigate that.

I'd be really surprised if you got an actual authoritative answer on the fine points of CHINESE TAX LAW on this website.
you are writing this to a german who is living in shanghai who met two canadians, a swede and a singaporean on this site. the green is fairly international. but thanks for the all caps.
posted by krautland at 10:24 PM on October 23, 2012 [1 favorite]

You don't really need to know the finer points of Chinese tax law -- you just need to know exactly what types of fapiao your company's accountant will accept, and give them as many of those as you can. If they won't accept a fapiao from a camera shop, obtain a restaurant fapiao of equivalent value (or more likely, several smaller fapiao). If you can make friends with someone who works for a photography company, you may be able to trade your photo equipment fapiao with them. You could also ask your landlord for a fapiao for a couple thousand RMB more than your actual rent.

Personal anecdote:
When I first came to China ten years ago, I was promised a "relocation bonus." After moving and settling in (and not knowing anything about the fapiao/tax system), the company's accountant told me that my relocation bonus was actually reimbursement for moving expenses, and I had to provide fapiao for everything. I ended up spending 3-4k RMB buying ~80k worth of fapiao for things like plane tickets, freight, and furniture.

Now I ask for a fapiao pretty much any time I buy anything, and have three folders full of fapiao at home: one for taxis, one for restaurants, and one for everything else. If a company I do freelance work for wants to write off my fee, I give them the equivalent value in whatever type of fapiao they can use. I also give them to friends who need them -- one friend has to come up with enough restaurant and taxi fapiao to cover her entire salary every month!
posted by twisted mister at 10:58 PM on October 23, 2012

twisted mister, you rock. I will try to get as many fa piaos as possible.
posted by krautland at 8:03 AM on October 24, 2012