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Magister - 2012-10-18
In response to EF Hangzhou Tax Avoidance/Utilities Scam! (James Mcdougall)

When you say 'come under (the spot-) light' do you mean that there is an actual investigation into this by the authorities that you can share with us or are you just referring to your own posts?

Tax evasion (different from avoidance and I think what you meant to write) isn't uncommon in china, i'd be surprised if the majority of teachers who post on this site pay tax particularly if they work for a private company. That doesn't make it right but as foreign teachers many of whom will only stay in china for a short time, What services would we be getting in return for our 20%? Good, free hospitals at the point of care? No. A good education for our children? No. Clean streets and cities? No. A pension? No. The list could go on and on. clearly when a company like ef evades paying tax it is not doing so because it has the teachers best interests at heart, it is doing so to ensure such contributions don't eat into profit. However, to argue that they are in some way cheating teachers by not making them pay tax does strike me as a case of cutting of your nose to spite your face.

I'd also be keen to understand where you get this figure of 20% from? Can you provide an accredited or official source for that figure? You are right to warn teachers of being wary of 'the money lady' because Chinese employers have a range of ways in which they skim of the top when it comes to paying you. In my opinion tax is just another way to do that. I have posted on this site before to comment that a growing number of employers in china are now advertising at gross wage as opposed to nett simply because they believe that the bigger figure will attract more hits for their job ad. In a country like china with a useless bureaucratic system and lack of visibility of that system, how would you ever know that the organization you work for is paying the correct amount of tax on your behalf and not just pocketing it? As a foreigner you simply don't. There are other posts i've read on this site saying that expats are exempt from paying tax for the first 2-3 years. By your own accounts of your time at EF this would rule out the majority of people who work there including yourself. There was also legislation bought in last year that requires foreigners and their employers to contribute to social welfare but the figure was not nearly as high as 20% (9-12% was quoted). Again there seems to be a large difference between the de jure and de facto conditions of living and working in china as many employers and subsequently teachers are yet to start paying this.

Messages In This Thread
EF Hangzhou Tax Avoidance/Utilities Scam! -- James Mcdougall -- 2012-10-17
Re: EF Hangzhou Tax Avoidance/Utilities Scam! -- Magister -- 2012-10-18
Re: EF Hangzhou Tax Avoidance/Utilities Scam! -- James Mcdougall -- 2012-10-18
Re: EF Hangzhou Tax Avoidance/Utilities Scam! -- Magister -- 2012-10-18
Re: EF Hangzhou Tax Avoidance/Utilities Scam! -- Justin Thyme -- 2012-10-18
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