I have permanent residency and an individual work permit. I used to pay 6% tax, same as locals. From Jan1st this year I have lost 20% of my salary every month, as the company’s accnts say it is now law to deduct 20% from foreigners regardless of residency status. Stupidly tho’ after much protesting on my part they now say they wont deduct any tax for the rest of year, as they’ve taken enough!! Is this is even legal? I have been living literally hand to mouth with my child for the past sixmonths, and keep asking around but have yet to find another company employing foreigners with PRC/ARC who are doing this. The acctnt firm says this law came in last August 2008. No doubt to finance those consumer vouchers. Can anyone give me advice? I’ll have to leave my job at the end of the year cos I cant spend another 6 months trying to survive mortgage and life on 43,000. The most laughable thing is the company is assumed by everyone to pay well and nobody believes how close to the edge I am and the company doesnt give a damn. Any advice gratefully read.
I empathise as does everyone here. This law sucks but we have to live with it. If your employer lives by the letter of the law, they must deduct 20% during the first 183 days of any tax year. When you file, you will get deductions and exeptions
Don’t forget to take your lease because you can clain a rental deduction plus your personal exeptions. Even if your not married but a partner is living with you without income, you can claim him/her also. You will get the difference later with your refund
Hang in there
This is not entirely true. Under the law as it now stands, for a foreign employee on a contract of a full year or longer, the employer has the options during the first 183 days of the tax year of either (1) deducting 20% or (2) deducting the amount for local residents, provided that the employer assumes the risk for covering the difference in the eventuality that the employment is terminated early or the employee otherwise ends up residing for less than the threshold period. However, this is solely at the employer’s discretion, so the employee does not have any “rights” per se with respect to this decision. They can only ask their employer to choose option (2) and hope the employer agrees.
In fact, many employers, including my own, do follow option (2) and continue to deduct only the local resident amount. (I and others have commented on this in earlier threads – those interested can do a search for more info.)
I, too, have been paying 20% for the past 6 months. I don’t have any kids though, so you really do have my sympathy!
I understood that this was only for 2009, as someone said, to finance the voucher scheme.
I was told today that this will continue into 2010 and forever! Does anyone know if this is the case or is the accountant mistaken (not totally out of the realm of possibility)?
Also, as i understood it at the time, it was at the discretion of the school’s owner as to weather or not they enforced the 20% for 6 months-0% for the next 6 or not. Most of the people I spoke to about it said that their companies weren’t going to bother with it and stayed at 10% each month. This being the case, you should be able to find another school that’s not following this particular “law” if you wanted to change. Obviously, that’s if this thing is going into next year and beyond. If the accountant at my school is mistaken and it was only for 2009, then you shouldn’t be getting taxed anything for the rest of the year and it will go back to normal anyway.
Let’s see what more knowledgable folk have to say…
[quote=“robinhood5000”]I, too, have been paying 20% for the past 6 months. I don’t have any kids though, so you really do have my sympathy!
I understood that this was only for 2009, as someone said, to finance the voucher scheme.
I was told today that this will continue into 2010 and forever! Does anyone know if this is the case or is the accountant mistaken (not totally out of the realm of possibility)?
Also, as i understood it at the time, it was at the discretion of the school’s owner as to weather or not they enforced the 20% for 6 months-0% for the next 6 or not. Most of the people I spoke to about it said that their companies weren’t going to bother with it and stayed at 10% each month. This being the case, you should be able to find another school that’s not following this particular “law” if you wanted to change. Obviously, that’s if this thing is going into next year and beyond. If the accountant at my school is mistaken and it was only for 2009, then you shouldn’t be getting taxed anything for the rest of the year and it will go back to normal anyway.
Let’s see what more knowledgable folk have to say…[/quote]
I don’t recall anyone saying it was just for 2009. The information on government websites indicates that it’s a permanent thing. I think The Bear posted a link on another thread.
Ah, well there ya go then! Looks like it’s time to find alternative employment, cherrypie.
Shouldn’t be too hard. As i said, there are plenty of schools choosing “option 2” and sticking with local tax. Just gotta look around.
Good luck with it!
OK, so I’ve been paying the 20% tax for the past six months, and now for July I discover that my company (a university) is still deducting 20%. I wasn’t sure what would happen for July (for that matter, neither was the department admin), but now I know.
Does anyone know a way to revert to 6% or even 13% tax for the remainder of the year? Is there a standard government form for this, or is it entirely at the employer’s discretion?
(At the beginning of the year I viewed the 20% as a mildly annoying enforced interest-free savings plan, but man, it’s bitten into the income way more than I’d anticipated.)
And if it’s 20% all year, wow, (a) infuriating, and (b) my income’s going to be seriously skewed towards August.
And good luck to the OP - I’ve been cutting out the luxuries, but it sounds like you’ve been having serious difficulty.
That’s weird lostinasia.
If I were you I’d get onto the admin to contact the tax office and clarify this. I’m pretty sure it is supposed to be for only the first 6 months. If they’re anything like most schools, you’ll have to moan until you’re blue in the face just to get them to make the call, but it’ll be worth it.
Interesting.
My (former) full time job that ended in July took ZERO withholding.
My part-time job takes 6% withholding all year.
This is the first I have heard of 20% withholding for the first six months.
How widespread this is I have no idea.