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Q: Paying tax on wages
I am pretty sure I know the answer to this one but I just want to throw it out there.
A friend of mine has been working as a part time esl teacher for several months (she does not have an RP), suddenly last month her employer says that new government rules say they have to pay tax on the wages foreign part time teachers earn. She and a few others in this mill are on the receiving end of this bollocks.
She asked me for advice regarding this.
As I understand it, a foreigner cannot legally do a part time job simply because their RP is tied to a particular company and location. Part time esl teachers are paid "cash" because they effectively don't exist in the legal sense. Do I have that right?
By the government requiring tax from illegal workers, wouldn't that indicate that they are condoning illegal work?
Would the company (and worker) be paying social security payments?
What would they use for a tax file number? Passport and L visa number???
My unicorn-poop detector is going off the scales.
What do you guys think?
8 years 6 weeks ago in Teaching & Learning - China
I'd definitely agree with your Unicorn-poop detector.
Doing a part-time gig in the side is illegal as you surmise. If this employer is actually going to delscre their part-time workers and pay tax on their illegal earnings then it could drop in the Unicirn-poop big time.
Cynical me thinks they are trying to claw some salary back.....
The other cynical me thinks they've found they can't put these wages against the profit/loss sccount as its undeclared expenses so maybe their account has said "if we pay the income taxes then we can declare the wages as a legitimate expenditure to reduce our profiles & therefore our corporation tax".
Income tax has always been payable on salaries, part-time or not if the monthly income exceeds 5000/month for foreigners. There's no change in the law...
Your friend needs to be very careful.....
iWolf:
Cynical me thinks they are trying to claw some salary back.
This was one of my cynical thoughts also.
Nothing good can come from this for anyone concerned including the company, methinks
Hotwater:
I've just read my reply (typed on my bloody phone) and must apologise for the bloody typing errors! Hopefully you understood it all.
I can see this getting messy. Obviously someone high up in the company wants to save money somewhere and can't just announce a drop in salary for the part-time teachers. So using the tax bullshit is a good way to try it on! How much does your friend need this job? Are they prepared to stand there ground? I'd suggest they first highlight that if their part-time salary was declared they'd have problems due to working illegally, in which case they'd have to stop working there. The obvious risk in that is that the school says goodbye to them.
iWolf:
lol....no worries mate. After reading curiousdude's comments, your all-thumbs phone comment wasn't a challenge at all.
Smells a lot like unicorn poo to me. My bet is the 'tax' is going straight into someone's pocket.
I would ask for tax receipts, in a non confrontational way. Say something like the receipts are needed for your own country's taxes or something. If your friend gets told it's impossible because the tax people don't give receipts or something then it's a no brainer...your friend is being scammed.
Part-time work is illegal. There is no way they are being taxed as they would need the proper documentation through their employer.
Employer is full of shit... have her say "Fine, I can be taxed but I will just contact the tax bureau to confirm this..."
Watch how fast their miraculously don't have to pay taxes!
Shining_brow:
If they do that, the employee gets deported, and the boss gets hit with a fine (and, since they probably have ppl on the inside, they won't care too much).
Robk:
Well, you wouldn't really do it lol... it would just be to scare the owner of the illegal school. The last thing they want is the spotlight shone on them. If they call your bluff, just quit... it is only part-time after-all.
Unless you are leaving, chances are they won't have all you passport documentation or anything since they didn't legally hire you. You can just deny it and say they got the wrong foreigner or something lol. Most likely they won't have proof unless they got you on a recording.
Shining_brow:
I'd like to believe you, but...
It looks very much like the concept of 'proof' is rather irrelevant here. A mate of mine told me last night - after being fined for not registering with the police - that the 'proof' he had in his hand didn't actually mean much... :(
As is typical in China, I'm still watching the Cold War season 1 documentary. During the Vietnam War, Russia was sending equipment to Vietnam through China and discovered China was stealing the equipment.
Englteachted:
The apologists won't call it what it is, but that is stealing plain and simple. The teachers should get together and say pay me what you should pay me or find someone else
iWolf:
During the Vietnam War, Russia was sending equipment to Vietnam through China and discovered China was stealing the equipment.
You just reminded me of a recent promotion my company had. Customers who spent over a certain amount would receive a free Kindle as a gift.
Some may be putting on tin hats right about now but I like to call it a coincidence that this week several team leaders and managers of various departments came to me asking if I would share some ebooks with them as they know i am a kindle addict.
Englteachted:
Yep, Chinese don't steal, I'm willing to bet they didn't spend the min amount. Many stores when promos like that happen they simple don't keep track of the promotional items to make it easier.
"(she does not have an RP),"
And, therefore by definition, is working illegally! Which the company knows, And obviously, the employee knows... (but the tax dept and police don't know.. yet)
Options -
a) play like Stiggs suggested, however, add in that the Tax Dept has issued fapiao's previously which have been used back home to prove tax;
b) Tell the employer that your embassy/tax department wants to know how much tax has been paid, and they are requesting a contact name and number in the accounts department (and, no - a letter from the company won't do);
c) she can tell them she needs to go tot he tax office (as she always has in the past) to collect the official tax records for her tax back home - knowing that all tax needs to be paid within 15 days of payment ot employees;
d) be completely up-front with the employer and tell them she knows it's a scam (see first point above about 'no RP'), and that if they're going to try to take money from the salary, then goodbye (unless, of course, the teacher is ok with the net amount left over);
e) other stuff that others might suggest if better...
iWolf:
(but the tax dept and police don't know.. yet)
You raise an interesting point.
Should said company actually pay the tax then the authorities will know the details of these workers (and apparently there are a few). Are they likely to sit on their hands or get down to business?
